AUSTRALIAN energy company Woodside aims to become a ‘global LNG powerhouse’ following its agreement to buy Tellurian for $900m, a deal that will more than double its existing output.
The company will take over the development of Tellurian’s Driftwood LNG, a liquefaction export facility currently under construction in Louisiana, US.
Adding to its Australian LNG assets, Woodside said the acquisition would further expand its LNG sources and presence in both the Pacific and Atlantic Basins.
Meg O’Neill, CEO of Woodside, said: “The LNG market over the past decade grew 60%. We’re expecting growth of 50% in the decade ahead.”
She added: “Whilst there is a lot of new LNG potentially coming into the market, there’s also a lot of increased demand for this product. So we’ve got confidence that we’re well positioned.”
The Driftwood LNG development will include five LNG trains across multiple phases, with Woodside expecting the first phase to begin in Q1 2025.
Once complete, the facility will have a total LNG export capacity of 27.6m t/y, this would more than double Woodside’s current LNG capacity in Australia, which more than doubles the company’s existing LNG output.
The company’s North West Shelf and Pluto LNG projects in Australia produce a total of 10m t/y of LNG. It is also developing the 6m t/y Scarborough LNG field off Western Australia, which it expects to begin operating in 2026.
Woodside estimates that development of phase one of the project will cost around US$930/t of capacity.
Groundwork for phase one is well under construction, with a gas turbine and LNG compressor foundations for the first train already complete.
The facility will also be connected to a 37-mile (60-km) pipeline that Woodside says will “source gas from the abundant low cost US gas supplies.”
Woodside mentioned Driftwood’s carbon competitiveness as a driver in its acquisition, pointing out its potential in reducing the company’s Scope 1 and 2 emissions.
The company hopes to reduce these emissions by 30% by 2030, and said Driftwood benefits from using technology with low emissions intensity compared to the LNG trains in its portfolio that were designed in the 1980s. The company intends to phase out its older technologies to meet its goals. Though the Scope 3 emissions resulting from customers burning the extra LNG Woodside produces will rise dramatically.
O’Neill added: “We retain our goal of investing $5bn in new energy projects and lower carbon opportunities between now and 2030, as well as the associated emissions abatement target of 5m t/y for our customers.”
The acquisition of Tellurian is expected to be complete by the end of the year. The development of Driftwood was extended by three years by the US Federal Energy Regulatory Commission (FERC), with a completion date of April 2029.
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