Woodside sells US$5.7bn stake in its first US LNG plant

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AUSTRALIAN energy major Woodside has sold a 40% stake in its Louisiana LNG project to private equity firm Stonepeak for US$5.7bn as it seeks a foothold in the burgeoning US gas export market.

The LNG project is under construction and is permitted to produce 27.6m t/y of LNG from five production plants – known as trains. Woodside is expected to make a financial investment decision for the first three trains shortly, giving greenlight for production capacity of 17.5m t/y.

Woodside CEO Meg O’Neill said: “Our partnership with Stonepeak, together with our lump sum turnkey EPC [engineering, procurement, and construction] agreement with Bechtel, and existing regulatory permits, give us confidence to progress at pace towards a final investment decision on Louisiana LNG.”

Bringing Stonepeak on board reduces the amount of money Woodside will have to invest in the project in the short term as its private equity partner will put in 75% of the capital expenditure costs for both 2025 and 2026.

O’Neill said: “We are very pleased to have Stonepeak join us in Louisiana LNG, given their demonstrated track record investing in US gas and LNG infrastructure across LNG facilities, LNG carriers, and floating storage and regasification units.”

Woodside said it will continue to look for partners for the project, reducing its stake to 50%.

It is the Australian firm’s first LNG project outside of Australia, where it operates the Pluto LNG and North West Shelf LNG projects. It acquired the US project – originally known as Driftwood LNG – last year through its US$900m buyout of Tellurian. O’Neill said the project positions Woodside to become a “global LNG powerhouse”.

The US has become the world’s dominant exporter of LNG, including as a major supplier to Europe, making up the shortfall in Russian gas in the wake of its invasion of Ukraine.

The US has increased total exports from around 3.8m t in 2016 to 91m t last year. The US Energy Information Administration expects this capacity to climb another 50% as three new projects – Plaquemines LNG, Corpus Christi LNG stage 3, and Golden Pass LNG – reach full operational capacity by the end of 2026.

Woodside’s Louisiana LNG plant is being engineered by Bechtel which won theEPC contract for the project. More than 270 km of pipeline needs to be built to bring in natural gas before it is cooled and shipped abroad.