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Highlights

  • Stonepeak to acquire 40% stake in Louisiana LNG Infrastructure LLC and contribute $5.7 billion towards project capex.

  • Deal significantly reduces Woodside’s upfront capital burden and improves cash flow profile.

  • Transaction supports final investment readiness and enhances attractiveness for future partners.

Woodside Energy (ASX:WDS) has signed a binding agreement with Stonepeak, a global investment firm with a focus on infrastructure and real assets, to sell a 40% equity interest in Louisiana LNG Infrastructure LLC. The deal marks a major milestone in advancing the U.S.-based LNG development project and underscores its appeal to global investors.

Under the agreement, Stonepeak will provide $5.7 billion in capital expenditure funding for the project’s 16.5 million tonnes per annum foundation development, with an accelerated contribution of 75% of project costs in 2025 and 2026. The remainder of its capital commitment will be deployed in the following years.

Financial and Strategic Case

Woodside highlighted that the transaction will materially reduce its near-term capital expenditure obligations, easing financial pressure as it progresses toward a final investment decision (FID) for the project. The deal not only validates the quality of the Louisiana LNG venture but also enhances its attractiveness to other potential equity investors.

The company said the forward capital cost estimate for the foundation development phase remains between $900 and $960 per tonne, covering engineering, procurement, and construction (EPC) expenses, contractor incentives, owner’s costs, allowances, and contingency — though this figure excludes pipeline and HoldCo-specific costs.

Project Structure and Operational Terms

Post-transaction, Stonepeak will hold 40% of InfraCo, the entity that will own and develop the LNG infrastructure, while Woodside will retain 60% via Louisiana LNG LLC (HoldCo). Woodside will operate InfraCo, which holds the Bechtel EPC agreement and will manage construction and ownership of the project’s liquefaction trains and shared facilities.

The agreement also includes a long-term liquefaction tolling contract between HoldCo and InfraCo, featuring competitive fee terms. While InfraCo focuses on infrastructure development, HoldCo will manage gas supply and LNG offtake.

Although Stonepeak’s total capital outlay is less than its nominal 40% share due to the accelerated funding model, the agreement provides cost certainty for Stonepeak and potential upside for Woodside through capex efficiencies. Any future cost overruns will be absorbed by HoldCo.

Timeline and Closing Conditions

The transaction’s effective date is set for 1 January 2025, with closing targeted in Q2 2025, subject to final investment decision and regulatory approvals. At closing, Stonepeak is expected to pay around $2 billion to cover its share of project capital already incurred from the effective date.

Woodside described the deal as a material step in de-risking the Louisiana LNG project and improving its own cash flow profile ahead of expected revenues from its Scarborough project in Australia.