Woodside takes FID on Louisiana LNG, inks feedgas supply deal with BP

Australian oil and gas major Woodside Energy has taken a final investment decision (FID) on its 16.5M tonnes per annum (mta) Louisiana LNG terminal. The development plan for the production and export terminal includes three trains, and Woodside said it is targeting first gas in 2029. The development also has expansion capacity for two additional LNG trains and is fully permitted for a total capacity of 27.6 mta.

"Development of Louisiana LNG will position Woodside as a global LNG powerhouse, enabling the company to deliver approximately 24 mta from its global LNG portfolio in the 2030s, and operating over 5% of global LNG supply," the company said in a statement to investors.

At full capacity, the project is expected to generate approximately US$2.0Bn of annual net operating cash in the 2030s. Woodside said the addition of the project takes its potential net cashflow projections over US$8Bn annually in the next decade.

Woodside said its forecast for total capital expenditure on the LNG project, pipeline and management reserve is US$17.5Bn. In early April, Woodside sold a 40% stake in Louisiana LNG to US-based infrastructure investment firm Stonepeak, which will take on US$5.7Bn of the total expenses in the initial projection, with Woodside paying US$11.8Bn. 

Woodside has reportedly been courting additional investment in the project, with Woodside chief executive Meg O’Neill telling the Wall Street Journal the company is in talks with a ’couple of parties’ and wants to cut its capital expenditures on the project roughly by half. A separate report from Bloomberg said Kuwait Petroleum is in talks to take a stake in Louisiana LNG and its overseas Foreign Petroleum Exploration unit is considering a supply deal.

Woodside has also lately announced a long-term supply purchase from BP for up to 640 billion cubic feet (Bcf) of gas a year from the oil and gas major. Under the agreement, Louisiana LNG subsidiary GasCo will buy gas from BP starting in 2029 for delivery via pipeline. Woodside said the deal was done, in part, due to what it called "verifiably low methane-intensity molecules", driven by its participation in the United Nations Environment Programme’s Oil & Gas Methane Partnership 2.0 (OGMP 2.0) initiative.

According to the OGMP, "Companies that join the partnership commit to the only comprehensive measurement-based reporting framework, which improves the accuracy and transparency of methane emissions data from the oil and gas sector".