News Summary
Woodside Energy Group Ltd. has finalized a $3.5 billion deal selling stakes in its Louisiana LNG export project and pipeline to Williams Cos. The transaction includes an 80% ownership stake in Driftwood Pipeline LLC and a 10% interest in Louisiana LNG LLC. Williams plans to invest $1.9 billion to develop the facilities further, aiming for the first LNG delivery in 2029. This partnership not only strengthens Woodside’s strategic position but also marks Williams’ entry into the LNG sector, reflecting a shift towards enhanced collaboration in the energy market.
New Orleans, Louisiana – Woodside Energy Group Ltd. has completed a significant transaction, selling stakes in its Louisiana liquefied natural gas (LNG) export project and an associated pipeline to Williams Cos. The deal, valued at $3.5 billion, aims to enhance Woodside’s strategic partnerships within the natural gas sector.
Williams has acquired an 80% ownership stake in Driftwood Pipeline LLC, as well as a 10% interest in Louisiana LNG LLC (HoldCo). The effective date for this transaction is set for January 1, 2025, with a purchase price of $250 million. Woodside will receive total proceeds of approximately $378 million, which includes reimbursements for capital since the effective date.
As part of this deal, Williams plans to invest around $1.9 billion to develop the LNG facilities and pipeline further. The transaction is a pivotal development in executing Woodside’s strategy for the Louisiana LNG project. Additionally, Williams will take over LNG offtake obligations for 10% of the produced volumes from the LNG facility once operational.
Williams currently operates more than 33,000 miles of pipelines throughout 24 U.S. states. Their subsidiary, Sequent Energy Management, boasts a marketing and optimization footprint of over 7 billion cubic feet per day (Bcf/d), which positions the company as a vital player in the energy sector.
The Louisiana LNG project is designed to achieve a total permitted capacity of 27.6 million tonnes per annum (Mtpa) across five trains. The initial phase includes three trains with a combined output capacity of 16.5 Mtpa. The project is targeting its first LNG delivery in 2029.
With this partnership in place, Woodside’s CEO has expressed excitement about collaborating with Williams, indicating that their expertise will bring operational benefits to the project. Williams’ president and CEO highlighted that this collaborative venture aligns with their goal to integrate upstream, midstream, marketing, and LNG capabilities effectively.
Following this transaction, Woodside’s total capital expenditure for the Louisiana LNG Project is now expected to be about $9.9 billion, down from an initial projection of $11.8 billion. This reduction reflects a strategic shift in cost management for the project while maintaining a strong partnership with Williams, which marks its first investment in LNG, underscoring its position in the natural gas market.
Woodside’s financial advisers for this transaction were RBC Capital Markets and Evercore, with legal counsel provided by Norton Rose Fullbright. The pivotal investment by Williams not only deepens their involvement in the LNG sector but also enhances the overarching strategic goals of both companies in fostering a robust natural gas supply chain.
The collaboration is set to play a significant role in the evolving landscape of the energy market, especially as the demand for LNG continues to rise. As the sector moves forward, the focus remains on strategic partnerships that drive growth, reduce costs, and enhance operational efficiency within the natural gas industry.
Deeper Dive: News & Info About This Topic
- Wall Street Journal: Woodside Energy Signs Up Williams as Investor in Louisiana LNG Project
- Reuters: Williams Pumps $1.9 Billion into Woodside’s Louisiana LNG Venture
- Bloomberg: Woodside Sells Stakes in Louisiana LNG Project to Williams
- Wikipedia: Liquefied Natural Gas
- Australian Financial Review: Woodside in $3.5B Deal on Louisiana LNG
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