News Summary
Woodside Energy has made a final investment decision for its $17.5 billion Louisiana LNG project, marking the largest foreign investment in Louisiana’s history. Set on a 1,200-acre site, production is expected to begin in 2029 with a capacity of 16.5 million tons per year, potentially expanding to 27.6 million tons. The project will create 15,000 construction jobs and 4,000 permanent positions, supported by a $5.7 billion investment from Stonepeak. Woodside aims for a 30% reduction in greenhouse gas emissions by 2030 while capitalizing on the US’s low-cost gas resources.
Calcasieu Parish, Louisiana – Woodside Energy has announced a significant milestone in its operations by making a final investment decision for the $17.5 billion Louisiana LNG project. This venture marks the largest foreign direct investment in Louisiana’s history and aims to establish a state-of-the-art liquefied natural gas (LNG) production and export facility.
The project will be developed on a sprawling 1,200-acre site located on the west bank of the Calcasieu River, south of Sulphur. Production is anticipated to commence in 2029, with plans for the facility to have three liquefaction trains, collectively boasting a capacity of 16.5 million tons per year. This new venture will also elevate Woodside’s overall LNG output to 24 million tons annually by the end of the decade.
Woodside holds the potential to expand the facility further, with existing permits that allow the addition of two more trains, which would push the total capacity to 27.6 million tons annually. The Louisiana LNG project was previously identified as the Driftwood LNG project, a development that Woodside acquired as part of its $1.2 billion acquisition of Tellurian last year.
Woodside’s Chief Executive, Meg O’Neill, has articulated the project as a pivotal scalable opportunity within the company’s existing LNG offerings in Australia. Furthermore, Woodside has partnered with infrastructure investment firm Stonepeak, which has acquired a 40% stake in the Louisiana LNG project. Stonepeak is set to provide $5.7 billion towards the capital expenditure, covering an estimated 75% of the total capex for 2025 and 2026.
The construction phase of the project is expected to generate approximately 15,000 jobs, with an additional 4,000 permanent jobs projected once the facility is operational. The internal rate of return (IRR) for the Louisiana LNG project is forecasted to exceed 13%, with a payback period expected around seven years. Upon becoming fully operational, the facility is estimated to deliver around $2 billion in annual net operating cash starting in the 2030s.
Woodside’s share of the total capital expenditure is projected at $11.8 billion. Despite the significant investment decision, the company’s targets for greenhouse gas emissions remain unaltered, still aiming for a 30% reduction by 2030. The Louisiana LNG project is supported by a comprehensive natural gas supply agreement with BP, ensuring the facility’s operation is backed by ample resources.
The project is strategically positioned to utilize the abundant low-cost gas resources available in the United States, while also benefiting from extensive gas supply networks. It has been characterized as a “game-changer” for Woodside, presenting considerable potential for increasing shareholder returns and creating value. Environmental compliance is a key factor, with the facility adhering to U.S. federal regulations as well as Louisiana state government support, which has been integral to the project’s development.
Woodside’s disciplined investment approach emphasizes alignment with the company’s capital allocation framework, aiming to exceed its projected financial metrics. This landmark investment not only reflects growing confidence in the LNG market but also highlights the strategic importance of Louisiana as a hub for energy production and export in the coming decades.
Deeper Dive: News & Info About This Topic
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