Woodside Gives Go Ahead to $17.5B Louisiana LNG Project

Australian energy company Woodside is moving forward with its diversification and international expansion announcing it has given financial approval for a massive $17.5 billion Louisiana LNG production and export terminal. The project is being called the “single largest direct foreign investment” in Louisiana’s history and a major sign of support for the Trump administration which has promised to dramatically expand the U.S. energy sector to supply the world.

The project was acquired in 2024 from developer Tellurian, but there had been rumors that Woodside might delay the massive project. The company recently announced it was selling 40 percent of Louisiana LNG Infrastructure, the operating company, to Stonepeak, a U.S.-based alternative investment fund. As part of the announcement for the final investment decision, Woodside reported Stonepeak will provide $5.7 billion toward the expected capital expenditure while Woodside will invest nearly $12 billion but has said it may look for additional strategic partners.

“Louisiana LNG is a game-changer for Woodside, set to position our company as a global LNG powerhouse and enable us to deliver enduring shareholder returns,” said Meg O’Neill, Woodside CEO. “The project benefits from access to abundant low-cost gas resources in the United States and boasts an asset lifespan of more than 40 years. It also has access to well-established interstate and intrastate gas supply networks.”

The plan calls for a three-train, 16.5 million tonne annual capacity with the first LNG coming in 2029. It also has an expansion capacity for two additional LNG trains and is fully permitted for a total capacity of 27.6 Mtpa. With the addition of the project, Woodside reports the company will have the capacity to deliver 24 Mtpa from its global LNG portfolio in the 2030s.

The project, which was known as Driftwood LNG, is located near Lake Charles, Louisiana. Work had begun in March 2022 under the prior ownership with Bechtel Energy executing the Engineering, Procurement, and Construction (EPC) contract to begin construction of phase one. The target was to reach the final investment decision with the project coming online by 2026 or 2027, but Tellurian encountered challenges launching a strategic repositioning in December 2023 with new management.

The original plan had called for 11 Mtpa in the first phase with a later expansion of 5.5 Mtpa. The advantage for Woodside in acquiring the project was that it was fully permitted and not subject to the hold on licenses launched during the review of the industry under the Biden administration.

Critics however were quick to point out that the plant will contribute to greenhouse gas emissions with one forecast reported by The Wall Street Journal that it would add 1.6 billion tons of GHG emissions over its 40-year life. Others are highlighting the global efforts to expand LNG production and export including Qatar’s massive project which is nearing completion. While the U.S. has been the global export leader, many point out that as industry looks to move away from LNG to synthetic fuels and other alternatives that do not emit methane, consumption of LNG is expected to plateau. Bloomberg cites data that the LNG supply will exceed consumption by 2027 with the oversupply growing by the end of the decade.

The gas industry has also been critical of the U.S. Trade Representative's plan to require a portion of LNG exports to be transported on U.S.-built ships. The industry points out the U.S. has not built a modern LNG carrier and has not developed the specialized skills for these high-value vessels. South Korea continues to be the leader in the sector, although Chinese shipbuilders have been working to build their participation in the sector. South Korea's Hanwha Ocean said it was prepared to use its expertise and recently acquired Philly Shipyard to build the first U.S. LNG carriers.

Announcing that it was moving forward with the Louisiana project, Woodside cites strong and sustained demand for LNG expected in both Asia and Europe, as those markets pursue energy security and decarbonization aspirations. Woodside points to the marketing opportunities across the Pacific and Atlantic basins saying the project creates a balanced and resilient portfolio for the company.