Woodside Energy will sell a 40 per cent stake in its Louisiana LNG infrastructure in a $US5.7 billion ($9.3 billion) deal with investment firm Stonepeak, as it looks to enter US production.
Woodside Energy will sell a 40 per cent stake in its Louisiana LNG infrastructure in a $US5.7 billion ($9.3 billion) deal with investment firm Stonepeak, as it looks to enter US production.
Stonepeak will pay $5.7 billion towards the foundation development cost of Louisiana’s LNG infrastructure, including an export terminal which is a key part of the development of the project acquired by Woodside in its US$1.3 billion deal for Tellurian last year.
Stonepeak will pay 75 per cent of development costs in 2025 and 2026, allowing Woodside to improve its cashflow profile ahead of revenue from the Scarborough project off the WA coast – slated to enter production in the latter of those two years.
Woodside said the deal would strengthen its ability to deliver shareholder returns over those years while developing Louisiana, which appears to be next cab off the rank in terms of a final investment decision across its portfolio.
Stonepeak will own 40 per cent of the Woodside-operated holding company – InfraCo – that will build the LNG infrastructure and the common-user facilities at the Louisiana project.
A second holding company, HoldCo, will be responsible for gas supply and LNG offtake.
Woodside plans to have Louisiana ready for a final investment decision from this quarter.
“This transaction further confirms Louisiana LNG’s position as a globally attractive investment set to deliver long-term value to our shareholders,” Woodside chief executive Meg O’Neill said.
“It is the result of a highly competitive process that attracted leading global counterparties and significantly reduces Woodside’s capital expenditure for this world-class project.”
Pre-FID construction is underway, and Bechtel is contracted by InfraCo to deliver three LNG trains.
Ms O’Neill flagged the potential for Woodside to sell down its ownership in the project and is shopping around a smaller stake.
“We are pleased with the strong level of interest from counterparties and customers in Louisiana LNG,” she said.
“We will continue advancing discussions with additional potential partners targeting an equity sell-down of around 50 per cent in the integrated project.”
Stonepeak is a key investor in US energy projects and has around $US72 billion worth of assets under its management globally.
Its senior managing director James Wyper said Louisiana was a compelling investment option.
“With the need to bring significant additional capacity online over the coming years, we have strong conviction in the critical role Louisiana LNG will play in the US LNG export market,” he said.
“The project represents a compelling opportunity to invest in a newbuild LNG export facility nearing FID approval with an attractive risk-reward profile and best-in-class partners in both Bechtel and Woodside to construct and operate the asset.”
Woodside was financially advised by RBC Capital Markets and Evercore and advised on legal by Norton Rose Fulbright.
Woodside’s share price fell more than 7 per cent after announcing the news today, amid a broader market sell-off as the world continues to react to global tariffs imposed by the US.
Oil and gas stocks have been amongst those hit hard.
The price of crude oil has fallen more than $US11 per barrel since April 2. It is currently trading just above $US60 per barrel.
Woodside shares were sitting at $18.95 at 10am.
