Woodside enriches US liquefied natural gas arsenal with $900 million acquisition

Australia’s energy giant Woodside has wrapped up the expansion of its liquefied natural gas (LNG) portfolio with the completion of the acquisition of Tellurian, a U.S.-based natural gas player. As the Australian heavyweight has now taken over the ownership and operatorship of a proposed 27.6 million tonnes per annum (mtpa) LNG terminal in Louisiana, United States, it has also put its stamp on this development opportunity with a new name to reflect the change of ownership.

Woodside disclosed an acquisition deal for all issued and outstanding common stock of Tellurian, including its owned and operated U.S. Gulf Coast Driftwood LNG development opportunity, in July 2024 for an all-cash payment of approximately $900 million. The Australian player has closed this acquisition with an implied enterprise value of around $1.2 billion.

After getting hold of all issued and outstanding Tellurian common stock for approximately $900 million cash, Woodside also renamed the Driftwood LNG development opportunity Woodside Louisiana LNG, which is an under-construction, pre-final investment decision (FID), LNG production and export terminal in Calcasieu Parish, Louisiana.

While emphasizing that bringing Woodside Louisiana LNG into the global portfolio represented a significant new chapter for the company, Meg O’Neill, Woodside’s CEO, highlighted: “This is a major growth opportunity that significantly expands our US LNG position, enabling us to better serve global customers and capture further marketing optimisation opportunities across both the Atlantic and Pacific Basins.

“Our acquisition provides a new strategic direction for this development. Woodside’s world class expertise in project execution, operations and marketing means we are well-positioned to unlock the development and generate value. Woodside Louisiana LNG is a competitively advantaged opportunity. It is fully permitted, front-end engineering design is complete, and site civil works are well advanced.”

According to the company, this newly acquired asset is a high-quality, scalable development opportunity, with a total permitted capacity of 27.6 million tonnes per annum. The Australian giant sees the latest addition to its global portfolio as “an attractive entry” into an opportunity with more than $1 billion of expenditure to date, anticipates multiple benefits, such as the expansion of its position in the LNG arena, ability to leverage its LNG development, operations, and marketing expertise to unlock the project’s potential and create value.

“Woodside is targeting FID readiness from the first quarter of 2025, with the experienced Tellurian team and engineering, procurement and construction contractor Bechtel having completed substantial work to advance the opportunity to this stage. We are also pleased with the inbounds received from multiple parties looking to enter the opportunity as a strategic partner,” added O’Neill.

The deal with Woodside followed Tellurian’s sale of its integrated upstream assets for $260 million to Texas-headquartered Aethon Energy Management, alongside the purchase of two million tons per annum of LNG from the Driftwood plant near Lake Charles, Louisiana.

The Woodside Louisiana LNG development, which has a valid non-free trade agreement (FTA) export paperwork, recently got hold of an extension of its Federal Energy Regulatory Commission (FERC) authorization.

Thanks to a design, that Woodside deems to be cost and carbon-competitive, development costs are expected to be around $900-960/tonne for both phases. The current development plan for the project comprises five LNG trains through four stages with a total permitted capacity of 27.6 mtpa.

With the development entailing 11 mtpa Phase 1 and 5.5 mtpa Phase 2, Woodside targets FID readiness for Phase 1 after the first quarter of 2025. Following a lump-sum turnkey contract, Bechtel started construction with pilings for Trains 1 and 2 complete.