Woodside signs Williams as an investor for Louisiana LNG construction to accelerate
Woodside Energy, a company based in Australia, has hired U.S.-based Williams to be an investor and operator of the Louisiana Liquefied Natural Gas Plant. This is to benefit from its infrastructure expertise and reduce costs as construction increases.
Williams will receive a 10% stake of Louisiana LNG Holding Company and 80% ownership in the Driftwood Pipeline, which will provide feed gas for the $17.5 billion project.
Williams, which operates over 33,000 miles (53.108 km) of pipe across 24 U.S. States, will pay Woodside $1.9 billion and contribute $378 million towards the project's costs.
Woodside CEO Meg O'Neill said that her company has expertise in developing LNG projects but needed to partner up with a pipeline operator with experience on the U.S. mainland like Williams.
Woodside is betting on an administration that supports fossil fuels and a growing demand for gas in the global market to launch its Louisiana LNG project as part of their major expansion strategy.
O'Neill stated that Woodside is "off to races" on the project, and its construction staff has ramped-up ahead of the first production anticipated in 2029.
Woodside wants to sell another 10% to 20% of the holding company following the Williams deal in order to reduce its interest in the overall project to 50%.
O'Neill stated that he wanted to attract other investors to the project. We won't set a deadline. We will continue to be patient but the time is getting shorter.
Woodside is adding Williams as the first new partner since Louisiana LNG was given the go-ahead by Woodside in April.
Prior to that, it had sold a stake of 40% in the infrastructure company for $5.7 billion to U.S. investors Stonepeak.
MST Marquee analyst Saul Kavonic stated that Williams was a “very strong partner” and would help to ease the balance sheet pressures of this huge project.
He said that the sale would raise the project's profile in the U.S. Investors view the sale-down positively.
He added that further sales would be required to confirm the value of the project.
The Australian company's shares rose by up to 4.1% on Thursday, reaching A$24.11.
O'Neill stated that Woodside wants to tap European markets, in particular, as they reduce LNG imports from Russia.
Louisiana LNG has already signed a deal for supply with Germany's Uniper, and a heads-of-agreement with Turkey's BOTAS.
She said that customers in Europe showed a great interest in LNG.
The U.S. will be a key source of LNG.
Louisiana LNG will have a production capacity of 16,5 million metric tonnes of super-chilled fuel in the first year. Reporting by Christine Chen, Sydney; Rishav chatterjee, Bengaluru. Editing by Jamie Freed.
(source: Reuters)
