Australia’s largest energy company, Woodside Energy (NYSE: WDS), has made a bold entrance into the U.S. liquefied natural gas (LNG) market by acquiring the troubled Driftwood LNG project and pushing it swiftly toward development. The move allows Woodside to sidestep many of the challenges that typically come with building an LNG facility from scratch.
For many companies, entering the U.S. LNG market means years of effort—selecting a site, securing permits, arranging financing, and constructing infrastructure. These steps often take 7 to 10 years and come with financial risks, including stock pressure, market shifts, and intense competition. But Woodside took a different path: it bought a nearly ready-to-go project at a bargain.
Last fall, Woodside acquired Tellurian’s Driftwood LNG project, which had already begun construction but was stalled due to financial troubles. The project benefits from its location near one of North America’s largest gas fields and has access to other major gas basins. Pipelines to feed gas into the facility are already under development and owned by the project itself.
Since the acquisition, Woodside has moved quickly. In May, it announced a Final Investment Decision (FID) for the first three trains of the plant—now renamed Louisiana LNG. These trains will produce 16.5 million metric tons per annum (mpta) of LNG, out of the project’s total approved capacity of 27.6 mpta.
CEO Meg O’Neill called the project a “game changer” for Woodside. In a statement, she said, “Louisiana LNG combines access to an abundant U.S. gas resource and a prime location with top-tier partners. It positions Woodside as a global LNG powerhouse and is expected to generate long-term value for shareholders.”
The project comes with several advantages. Groundwork had already started under Tellurian, and an engineering, procurement, and construction (EPC) contract is in place with Bechtel, one of the industry’s top contractors. This significantly reduced the pre-FID risk and allowed Woodside to advance quickly.
However, challenges remain. Only about 1 mpta of the 16.5 mpta has been secured under long-term Sales and Purchase Agreements (SPAs), specifically with German utility Uniper. For comparison, other recent Gulf Coast LNG projects—such as Venture Global and NextDecade—secured contracts for two-thirds of their capacity before reaching FID.
Still, moving early could help Woodside gain an edge. By starting operations in the late 2020s, it may beat out competitors still waiting for FID approval. Analysts at RBN Energy noted that Louisiana LNG’s approval could make it harder for other Gulf Coast projects to attract investors and buyers, especially those relying on non-binding Heads of Agreement (HOAs) instead of firm SPAs.
To reduce risk and upfront spending, Woodside is also bringing in partners. In April, private equity firm Stonepeak agreed to take a 40% equity stake in the project and will fund 75% of capital expenses through 2026. This allows Woodside to delay major spending until 2027, when another major project, Scarborough, is expected to be operational.
Speaking at CERAWeek, O’Neill confirmed that Woodside is in talks with additional potential investors. “We want to reduce our capital commitments to roughly half the total cost,” she said. The $17.5 billion project will be developed in phases and aims to begin LNG production in 2029.
Woodside’s acquisition and fast-tracked development of Louisiana LNG mark a significant step in its global LNG strategy. By seizing a stalled project with strong fundamentals, the company is positioning itself to play a major role in the next phase of LNG expansion.
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