Woodside Energy may keep up to 80% of Louisiana LNG project

Woodside Energy intends to retain up to 80% ownership in its $17.5 billion Louisiana LNG project, seeking to divest a minority 20-30% stake in the holding company to potential partners, including Saudi Aramco, despite having already approved construction. This strategic approach is supported by a prior $5.7 billion deal with Stonepeak, which acquired a 40% interest in the project's supporting infrastructure, funding 75% of its capital expenditure through 2026.

Analysis

Woodside Energy is strategically advancing its $17.5 billion Louisiana LNG project by retaining a majority stake of up to 80%, seeking to divest only a 20-30% interest in the holding company to potential partners like Saudi Aramco. The company's negotiating position is substantially strengthened by a prior $5.7 billion deal with Stonepeak, which covers 75% of the project's capital expenditures for this year and 2026. This financial backing enables the "disciplined" and unhurried approach articulated by CEO Meg O’Neill, and allowed Woodside to approve construction before finalizing a partner for the holding company. This structure de-risks the project's near-term execution and funding, shifting the focus to securing favorable long-term partnership terms for the remaining minority stake in an asset acquired via the $900 million takeover of Tellurian.

Key Decisions for Investors

• Investors should view the Louisiana LNG project's near-term funding as largely de-risked due to the Stonepeak agreement, allowing Woodside to optimize the value of the final 20-30% equity sale.
• Monitor announcements regarding the selection of an equity partner, as the terms of this deal will be a significant catalyst for valuation, but anticipate a protracted timeline given management's stated patient approach.
• Evaluate Woodside's long-term growth profile based on retaining a substantial majority stake in this major LNG asset, which amplifies the potential impact of the project's future cash flows on the company's valuation.