Woodside Signs Agreement for Louisiana LNG: A Boost for US LNG Exports

Woodside Energy, an Australian energy giant, has recently signed a revised lump sum turnkey engineering, procurement, and construction (EPC) contract with Bechtel for the development of the Louisiana LNG project. This significant move positions Woodside as a major player in the growing global LNG market and strengthens its presence in the United States. The Louisiana LNG project, with a total permitted capacity of 27.6 million tonnes per annum, is a high-quality, scalable development opportunity that offers competitive pricing and schedule certainty.

The revised EPC contract with Bechtel provides Woodside with a competitive edge in the current market environment. The forward cost for the foundation development is estimated at $900-960 per tonne, unchanged from the time of acquisition. This competitive pricing, coupled with the targeted final investment decision (FID) readiness by the first quarter of 2025, positions Louisiana LNG favorably in the global LNG market. The revised EPC contract, signed under a limited notice to proceed (LNTP), allows for continued site construction and commitment to key materials and services required for the foundation project.

Woodside's acquisition of Louisiana LNG from NYSE-listed energy firm Tellurian in October 2024 for $1.2 billion has opened up significant opportunities for the company. The project's advantages include its fully permitted status, Bechtel as the EPC contractor, and its strategic location in Calcasieu Parish, Louisiana. With Louisiana LNG, Woodside can better serve global customers and capture marketing optimization opportunities across both the Atlantic and Pacific Basins. Moreover, the project aligns with Woodside's long-term growth strategy of expanding its US LNG position and serving global customers.

Woodside's Chief Executive Officer, Meg O'Neill, has expressed confidence in the company's ability to finance its share of the development costs from its own balance sheet. She also mentioned that Woodside is working towards securing competitive EPC pricing and has locked in natural gas supplies after the final investment decision on the project. The project is expected to start production in 2028.

The Louisiana LNG project's competitive pricing and schedule certainty provide Woodside with a strong position in the current market environment. The company's ability to leverage its existing LNG marketing network and operational expertise can lead to potential synergies and cost-saving opportunities. Additionally, the project's scalability and flexibility align with Woodside's long-term growth strategy, making it an attractive investment opportunity.

In conclusion, Woodside's signing of the revised EPC contract for the Louisiana LNG project reflects the company's commitment to capitalizing on the growing global LNG market. With its competitive pricing, schedule certainty, and strategic location, Louisiana LNG presents a lucrative opportunity for Woodside to expand its US LNG position and better serve global customers. As the project progresses towards its final investment decision in the first quarter of 2025, investors should monitor Woodside's developments in the LNG sector.