About Woodside and the Louisiana Project
Woodside, an Australian petroleum company, is set to develop a significant Liquefied Natural Gas (LNG) project in Louisiana, USA. In partnership with Pemex, Woodside plans to invest $17.5 billion in this project, aiming to move 5% of the global LNG supply by 2030.
Woodside’s Global Operations and Relevance
Woodside is a prominent player in the global energy sector, with operations spanning across Australia and other international locations. The company’s expertise in project execution, operational excellence, customer relationships, and marketing makes it a key participant in the LNG market. The Louisiana project is a strategic move to strengthen Woodside’s position as a global LNG giant and deliver long-term returns to its shareholders.
Project Details and Impact
The Louisiana LNG project includes three liquefaction trains with a combined annual capacity of 16.5 million tonnes, transported via pipeline and ships from southern United States.
- Woodside plans to commence LNG production in 2029, delivering approximately 24 million tonnes annually from its global portfolio by the 2030s, accounting for over 5% of the world’s LNG supply.
- The project has permits for expansion to five liquefaction trains, with a total authorized capacity of 27.6 million tonnes.
- The project offers an attractive investment with a projected internal rate of return (IRR) exceeding 13% and a payback period of seven years. It is expected to generate around $2 billion in annual operating cash flow at full capacity during the 2030s.
- Furthermore, the project is anticipated to bolster Woodside’s value creation phase, with its global portfolio potentially generating over $8 billion in annual operating cash flow during the same decade.
Investment and Partnerships
Stonepeak, a private equity firm, is the primary investor in Louisiana LNG Infrastructure LLC, contributing $5.7 billion of the estimated investment, accounting for 75% of the required capital in 2025 and 2026. Woodside’s share of the total projected expenditure will be $11.8 billion.
CEO’s Perspective
Meg O’Neill, Woodside’s CEO, emphasized the historical significance of this project for the company:
“Louisiana LNG is a game-changer for Woodside, positioning us as a global LNG giant and enabling us to deliver sustainable returns to our shareholders. This world-class project is an attractive investment with mitigated risks, leveraging our proven strengths in project execution, operational excellence, customer marketing, and relationships to generate substantial cash flow and create long-term sustainable value. We have secured quality partners and are ready to make the final investment decision. This decision reinforces our disciplined investment approach with returns exceeding our capital allocation framework.”
O’Neill also highlighted the strategic benefits of adding Louisiana LNG to Woodside’s Australian LNG business, creating a balanced and resilient portfolio that combines long-life and flexible LNG assets with high-performing oil assets. The project capitalizes on abundant and low-cost US gas resources, as well as established state and interstate natural gas supply networks. Louisiana LNG’s marketing opportunities in the Pacific and Atlantic basins will leverage Woodside’s proven LNG marketing capabilities and strengthen its position in Asia.
Project Milestones and Economic Impact
The Louisiana LNG project is expected to be the largest foreign direct investment in Louisiana’s history and the first new-build LNG project in the United States to reach a final investment decision since July 2023.
- During its construction phase, the project is projected to create approximately 15,000 national jobs.
- Woodside acknowledges the support from both the US federal and Louisiana state governments.
Key Questions and Answers
- What is the Woodside Louisiana LNG project? It’s a $17.5 billion investment in an LNG facility in Louisiana, USA, aiming to move 5% of the global LNG supply by 2030.
- Why is this project significant for Woodside? The Louisiana LNG project strengthens Woodside’s position as a global LNG player, offering long-term returns to shareholders and leveraging the company’s proven strengths in project execution, operations, customer relationships, and marketing.
- Who is the primary investor in this project? Stonepeak, a private equity firm, is the main investor, contributing $5.7 billion of the estimated investment.
- What are the project’s expected benefits? The Louisiana LNG project is projected to create around 15,000 national jobs during construction and contribute significantly to Woodside’s operating cash flow in the 2030s.
- How does this project impact Woodside’s global portfolio? Adding Louisiana LNG to Woodside’s Australian LNG business creates a balanced and resilient portfolio, combining long-life and flexible LNG assets with high-performing oil assets.
