Sources: Woodside Australia is in talks with three partners about Louisiana LNG.
Multiple sources have confirmed that Woodside Energy is in talks with several potential investors to buy stakes in the Louisiana liquefied gas plant. These include Tokyo Gas, Japan’s JERA, and Saudi Aramco’s MidOcean Energy. This sale of stakes is a test of market expectations for LNG following Donald Trump's return to the U.S. Presidency. Trump said that trade partners should purchase more U.S. Energy and has issued several executive order in his first week in office to boost domestic oil and natural gas production. Louisiana LNG offers global buyers the opportunity to diversify their supplies and possibly fend of U.S. Tariffs under the Trump Administration, by increasing U.S. Energy Imports and narrowing trade deficits which irks the U.S. President.
Seven people who are familiar with the situation were contacted. Seven people were able to provide information on the matter.
Tokyo Gas had been in discussions for a stake, but this was not reported previously. The other potential buyers were not reported before.
One source said that Williams Companies, the U.S. pipe-line operator, had also held discussions with Woodside regarding the purchase of an equity stake. JERA, MidOcean Energy and Tokyo Gas refused to comment. Williams Companies has not responded to a comment request.
Woodside will make a decision in the near future and has indicated that it might accept multiple bids. It is looking to sell half of the first phase LNG export project. The construction of this phase should cost approximately $16 billion.
The project will be constructed in four phases, with the first phase producing 11 million metric tons per year (MTPA) supercooled gas. Woodside stated that Louisiana LNG will produce 27,6 MTPA when completed. Woodside refused to comment on the bidding but referred to its previous statements that the project is moving as expected and has attracted high-quality potential partner interest.
Three sources claim that the LNG developer also wants higher prices for contracts. Woodside told its buyers that the premiums were higher because they would cover the rising costs of building plants, and also because the future development was relatively low-risk. Woodside has already secured all permits to build the plant.
One source stated that Woodside wants liquefaction charges of $2.70-2.90 for every million British thermal units (mmBtu). This is approximately 20 cents higher than current market rates. Two sources stated that shorter agreements would be on the high end of the spectrum.
LNG plants cool natural gas to liquid form so it can be transported by special ships. Trump has relaxed regulations on the construction of new plants. However, his tariffs against steel and other products raised concerns over the cost of the plants in the future. Woodside had previously said that a decision would be made soon on the sale of stakes in this project. Meg O'Neill, CEO of Woodside, said in September that the company wanted clarity on the partnership approach before making a final decision. She also expected to bring multiple partners into Louisiana LNG between March 2025 and March 2025.
The decision is still to be made. However, two sources have said the bidding window has closed. Another source said Woodside closed its online project data room in early February, a repository of investor information, as a sign that the process was nearing an end. Woodside, the Australian oil and natural gas company that acquired Tellurian Inc. for $1.2 billion last year, changed the name of the Louisiana LNG Project from Driftwood LNG. Reporting by Marwa Rashed in London, Emily Chow and Curtis Williams, in Houston, and David French, in New York. Additional reporting by Yuka Obayashi and Yousef Sabah in Dubai. Editing by Peter Henderson, Nita Williams and Nita Williams.
(source: Reuters)
