Stonepeak Buys 40% Stake From Woodside Energy In Louisiana LNG Project

Woodside said in a statement that this deal would reduce capital spending needs and would be a significant step towards a final investment decision on the Louisiana LNG plant.

While the whole world is reporting losses and complaining of economic uncertainty with the recently unleashed Trump tariffs, the President’s plan to improve the sales of US energy seems to be working. The US investment firm Stonepeak is set to buy a 40% stake in Woodside Energy’s Louisiana LNG project. The Australian energy company confirmed that Stonepeak would also contribute $5.7 billion in capital expenditures. 

As per the deal, Stonepeak which manages about $72 billion in assets, will foot $5.7 billion in capital expenditure which is required for the project’s foundation development. The company’s contribution will be accelerated this year and the next. 

Woodside said in a statement that this deal would reduce capital spending needs and would be a significant step towards a final investment decision on the Louisiana LNG plant, adding that it intended to further sell down its holdings, and was in discussions with other potential buyers for the same. 

Reuters reported that CEO Meg O’Neill said that this decision has been taken because more infrastructure partners increase company valuation and pave the path for more strategic equity partnerships.  

As the demand for gas was on the rise, Woodside spent $1.2 billion to purchase Tellurian last year, to develop the 27.6 million metric tons a year Louisiana LNG project, formerly known as Driftwood in four phases. The first phase alone is estimated to cost $16 billion. As expected, investor concerns over the capital intensity of Woodside’s US expansion strategy have reflected on its underperforming shares. 

With this new partnership, Woodside’s worries have subsided, as Stonepeak will bear 75% of capital expenditure in 2025 and 2026, which has augmented the project’s economics and cash flow. Woodside will also have the authority to make a final investment decision without locking in equity and offtake partners. 

Stonepeak’s decision to make this purchase has been explained as a good opportunity to invest in an LNG export plant. The company is assured of Louisiana’s critical role in the US LNG export market. By boosting U.S. energy imports and reducing trade imbalances that have been a source of annoyance for the President, Louisiana LNG offers global buyers a chance to diversify their supply base and possibly avoid U.S. tariffs under the Trump administration.  

News reports emerged in February that Woodside Energy was in talks with multiple potential buyers like Tokyo Gas, Saudi Aramco-backed MidOcean Energy and Japan’s JERA, who were interested in a stake in its Louisiana liquified natural gas (LNG) plant. Market analysts expect that Woodside will have to relinquish another 20-30% of these stakes, including a gas supply and LNG offtake business, to meet its 50% sell-down target. 

Trump has been very vocal in his pro-US energy stance and has even signed an executive order reversing the 2024 pause on export permits, instated by the Biden administration. Under the Democrat’s Presidency, a study found that while the US natural gas supply is sufficient to fulfil domestic demand, unrestricted LSG exports would result in a 31% increase in gas price by 2050, causing gas bills across the US to surge by at least a $100 annually. 

However, President Trump, on the other hand, is confident that while there may initial hiccups in the economy, tariffs are ultimately beneficial to the US economy and is a firm believer in expanding manufacturing on American soil. The Republican built his election campaign on promises to revoke drilling and licensing restrictions, promising a rejuvenation for the oil sector in the US. Therefore, it comes as no surprise that it is during his tenure that companies are eager to buy into the oil and energy businesses. 

While there is no telling what the economic situation of such decisions could be, given the global recession the world is currently bracing itself for; there is little doubt that unrestrained oil production and exports are bound to have irreversible environmental consequences.