Woodside sees $1.2-B U.S. LNG play paying off as Trump policies drive deals
- Woodside to benefit from Trump's trade agenda, CEO O'Neill says
- Louisiana LNG project has "competitive advantage," to be FID ready in Q1 2025
- Shares rise 2.8% on better-than-expected earnings and dividend
Woodside Energy, Australia's top gas producer, is well positioned to capitalize on demand for U.S. liquefied natural gas (LNG) driven by President Donald Trump’s trade policy and pro-fossil fuel agenda, CEO Meg O’Neill said on Tuesday.
She said the Trump administration’s efforts to reduce the trade deficit by pressuring allies to buy more U.S. goods was already generating potential business for Woodside’s Louisiana LNG project, which it acquired for $1.2 B last year.
“Many of the customers we talked to or tendered to are progressing LNG procurement deals with us because they want to be able to then say, 'We've adjusted our balance of trade',” she said in an interview after the company released its annual results. “If you're a foreign nation and you're asking what are the sorts of things I can buy from the U.S. to adjust balance of trade, energy - LNG in particular - is low-hanging fruit.”
Woodside bought Tellurian to develop the 27.6-metric MMtpy Louisiana LNG project, formerly called Driftwood, and reaffirmed on Tuesday it expected to be ready to make a final investment decision (FID) from the first quarter of 2025.
Concerns about Woodside's U.S. acquisitions, including a major ammonia project, have weighed on its shares, which have sharply underperformed peers over the past year. But the stock rose 2.8% on Tuesday on the company's better-than-expected earnings and dividend.
Woodside reported a 13% drop in annual underlying profit to $2.88 B on weaker oil and gas prices, slightly ahead of the Visible Alpha consensus of $2.83 B. It declared a final dividend of 53 cents per share, beating a consensus of 51 cents.
O’Neill told investors on an earnings call that Louisiana LNG had a “competitive advantage” over other U.S. exporters on cost, commercial and schedule grounds and that the project could command a price premium.
“We're at least a year ahead of everybody else in the U.S., and we continue to attract a premium from many players who are interested or seriously interested in U.S. LNG,” she said.
The Tellurian deal was initially poorly received by investors, but now “Woodside’s giving signals that give the market more confidence,” said MST Marquee senior energy analyst Saul Kavonic.
“The marketing and sell down process for Louisiana LNG is advancing well. A final investment decision is all but inevitable,” he said.
Earlier this month, Woodside held talks with several potential buyers including Tokyo Gas, Japan's JERA and Saudi Aramco-backed MidOcean Energy to sell as much as half its stake in the project.
O’Neill said Trump’s promotion of oil and gas was a “very clear pro” for Woodside, as the company faces “red and green tape” for projects in Australia.
She dismissed concerns about potential competition from a proposed Alaska LNG to supply North Asia.
“It’s very expensive to develop and will take a very long time,” she said. “I'm not particularly concerned about developments that will come online in a decade's time.”
($1 = 1.5746 Australian dollars)
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