Woodside investment decision on Louisiana LNG may slip into Q2
Australia's Woodside LNG may push a final investment decision on its Louisiana LNG plant into the second quarter of 2025 as talks to sell half of the project drag on, CEO Meg O'Neill said Monday.
Woodside wants to sell as much as 50% of the project. Reuters has previously reported that the company is in talks with several potential buyers including Tokyo Gas, Japan's JERA and Saudi Aramco-backed MidOcean Energy.
"We want to make sure we have confidence in the partners and that we have an adequate sell down," O'Neill said in an interview on the sidelines of an energy conference in Houston. "So look, it may slip into the second quarter, but our goal is to be ready from the first quarter."
Woodside had previously said it would make an investment decision by the end of the first quarter on building the first phase of the 27.6-MMtpy facility at Lake Charles, Louisiana. The cost of building the first phase is estimated at around $16 billion. O'Neill said there is strong interest in the project because it is fully permitted and has an engineering procurement and construction(EPC) contract with Bechtel.
In phase 1 of the project, Woodside would keep 8 MMtpy to develop its Atlantic basin trading portfolio as the company seeks to move away from just selling to direct customers, said O'Neill. "So trading has become an increasingly important part of our business, but as the portfolio gets bigger, we see more opportunity to create value from that part of the business," said O'Neill.
Woodside has offered LNG buyers shorter contracts at higher rates than the 20-year offtake agreements that have long been an industry standard. O'Neill said this provides opportunities for her company. "Some customers may prefer a shorter duration, and that's fine for Woodside. In fact, in some ways, that opens opportunity for us to find new customers as we progress down the track," she said. "So we offer more flexibility. And again, I think that's something that differentiates us."
Woodside would keep its agreements to buy LNG cargoes from Commonwealth LNG and Mexico Pacific LNG, she said. The two companies are developing LNG projects in Louisiana and Mexico to export U.S. natural gas. Woodside is aware both projects have slowed and is focused on its own project, said O'Neill.
Woodside does not plan to invest in the gas production to feed the LNG plant because it can buy from multiple gas producers and from different gas regions to supply the Louisiana LNG project, she said.
Woodside is also working through the engineering issues to take a final investment decision on the pipeline that will deliver gas to the Louisiana LNG plant, said O'Neill.
Trinidad challenges. Woodside's CEO also said it is "very clear" that the fiscal terms are quite challenging to develop a gas resource of the size and complexity of its deep water Calypso discovery in Trinidad and Tobago.
The Trinidad government has been pressing Woodside and other operators to develop gas discoveries to meet the shortfall for its Atlantic LNG flagship plant and petrochemicals industries.
The Trinidad government has been very receptive to having a conversation about trying to find a pathway forward, said O'Neill.
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