Woodside Energy, Australia’s leading natural gas producer, announced on Tuesday its plans to sell an additional 20%-30% stake in its Louisiana LNG project. The decision follows growing interest in the $17.5 billion venture, which received final approval last week. Liz Westcott, the company’s chief operating officer for Australia, explained that the sale would help Woodside reach its target of owning 50% of the project. Westcott highlighted that selling a portion of its wholly owned holding company would allow the company to maintain a significant stake while also raising the necessary capital. “Our goal will be to sell down in the order of 20%-30% of Hold Co. That will give us a targeted investment capital of around 50%,” she stated at the Macquarie Australia Conference.
Woodside’s decision to move forward with the Louisiana LNG project comes after the U.S. administration’s favorable stance on fossil fuels and strong demand for natural gas in Europe and Asia. The company is confident that the project will yield an internal rate of return of 13% and achieve a payback period of seven years. The first gas is expected to be produced in 2029, with the project generating $2 billion in annual net operating cash flow during the 2030s.
The project’s green light followed a deal where Woodside sold a 40% stake in the project’s infrastructure company to Stonepeak, an investor who is contributing $5.7 billion towards the capital costs. Analyst expectations were aligned with Woodside’s goal of a 20%-30% divestment, viewing it as a necessary step to manage risks associated with the project and to affirm its market value. Discussions with potential partners have intensified, and Woodside has seen growing interest from investors since the project was officially approved.
Westcott noted that while the company is eager to move forward with the sale, it is taking a patient approach to ensure the right partners are chosen. The company aims to balance speed with careful selection as it progresses toward finalizing the investment structure for Louisiana LNG.
READ MORE: