Why Woodside's Louisiana LNG Deal with Aramco Signals a Golden Opportunity for LNG Investors

The global energy landscape is shifting, and with it, the stakes for companies positioned at the intersection of traditional fossil fuels and the energy transition. Woodside Energy’s collaboration with Saudi Aramco over its $17.5 billion Louisiana LNG project isn’t just a deal—it’s a strategic masterstroke that transforms Woodside into a bellwether for LNG investors. With Aramco’s potential equity stake, LNG demand from Asia and Europe, and synergies in lower-carbon ammonia, this partnership slashes execution risk while unlocking a multi-decade revenue stream. Here’s why Woodside’s stock (WDS.AX) is a buy now.

The Louisiana LNG Project: A Cornerstone Asset with Built-In Demand

Woodside’s Louisiana LNG terminal—now under construction—will process 16.5 million tonnes per annum (Mtpa) of LNG, expandable to 27.6 Mtpa, and aims to deliver first gas by 2029. This project isn’t just a bet on LNG; it’s a fortress of demand. Asia’s LNG appetite is projected to surge by 20% by 2030, driven by China, India, and Southeast Asia’s industrialization, while Europe’s pivot from Russian gas has solidified LNG as a critical energy security tool.

The project’s financials are equally compelling. With an internal rate of return (IRR) exceeding 13% and a seven-year payback period, Louisiana LNG is a cash-generating machine. Woodside’s phased equity sales—starting with a $5.7 billion stake sale to Stonepeak—already reduce equity exposure, and Aramco’s potential 20%-30% stake further de-risks the project.

Aramco’s Strategic Stake: Validation, Liquidity, and Global Reach

Aramco’s interest isn’t incidental. As the world’s largest oil producer, its non-binding agreement with Woodside signals confidence in Louisiana LNG’s $17.5 billion price tag and its role in global energy supply chains. The partnership also includes LNG offtake arrangements, ensuring Woodside’s output has pre-committed buyers.

But the true game-changer is the geopolitical and financial credibility Aramco brings. By aligning with Saudi Arabia’s energy ambitions, Woodside gains access to Middle Eastern capital and market influence. This isn’t just a financial stake—it’s a strategic alliance that positions Woodside as a partner of choice in a post-Russian gas world.

The Lower-Carbon Ammonia Play: ESG Alignment and Future-Proofing

The Woodside-Aramco deal isn’t confined to LNG. The two companies are exploring lower-carbon ammonia production, a sector primed for growth as industries seek emissions-reduction solutions. Ammonia’s potential as a shipping fuel, fertilizer, and hydrogen carrier aligns perfectly with Woodside’s ESG goals.

Woodside’s use of BP’s MiQ-certified gas—verified via the UN’s OGMP 2.0 methane standards—already gives it an edge in ESG compliance. Partnering with Aramco on ammonia amplifies this advantage, turning Louisiana LNG into a dual-purpose asset: a traditional energy producer and a gateway to green hydrogen economies.

Why Buy Now? The Catalysts Are Clear

• Reduced Execution Risk: Aramco’s involvement adds a $900 billion balance sheet as a backstop.
• FID Finalized, Construction Underway: Woodside’s April 2025 Final Investment Decision (FID) is a done deal—the project is moving forward.
• Stake Sales Unlock Value: The remaining 20%-30% equity sale will attract investors, reducing Woodside’s capital burden and signaling confidence.
• 2029 First Gas Catalyst: The project’s completion will trigger revenue recognition, boosting earnings visibility.

The Bottom Line: A Buy Before the Surge

Woodside’s Louisiana LNG project is a strategic trifecta: it taps into Asia/Europe’s insatiable LNG demand, leverages Aramco’s geopolitical clout, and pioneers ESG-aligned ammonia. With Woodside’s shares up 2.5% in early May trading and the stock trading at a discount to its 2029 cash flow potential, this is a no-brainer buy.

Investors who act now gain exposure to a $17.5 billion cash-generating machine with a built-in buyer (Aramco), a project that’s already shovel-ready, and a management team doubling down on ESG leadership. Louisiana LNG isn’t just Woodside’s future—it’s the future of energy.

Action Item: Buy Woodside (WDS.AX) ahead of its Q2 2025 update and the closing of additional stake sales. This is a multi-year growth story with catalysts at every turn.