For LNG, Woodside Eyeing U.S. Tariffs

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Tariff announcements from the U.S. government mean a measured stance on the planned Louisiana LNG export facility is necessary, Australian energy company Woodside Energy Group (NYSE:WDS) (Perth) said.

U.S. President Donald Trump's government has sanctioned a handful of export terminals for liquefied natural gas (LNG) since January. Established as the world leader in LNG exports in 2022, under former President Joe Biden, Trump is seeking an agenda of energy dominance.

His trade policies, however, are creating headwinds in an energy sector dealing with the prospect of lower-for-longer commodity prices. Upstream services firm Halliburton (NYSE:HAL) (Houston, Texas) on Tuesday said activity could be curbed by the demand destruction that could come as a result of tariffs.

The company reported North American revenue of $2.2 billion during the first quarter, down about 12% from the same period last year.

On Wednesday, Australia's Woodside said it too was weighing the impact of tariffs on its plans in North America.

"We are assessing the potential impacts of recent tariff announcements and potential further trade measures on Louisiana LNG," said Meg O'Neil, the chief executive officer at Woodside. "Around 25% of Louisiana LNG's estimated capital expenditure is equipment and materials, approximately half of which is currently expected to be sourced from the U.S."

Woodside renamed the facility after it completed its buyout of LNG developer Tellurian in October. It previously had been named Driftwood LNG. Louisiana LNG already has the permits necessary for the start of construction at the facility planned for Lake Charles, Louisiana.

Phase I would be able to export as much as 1.5 billion cubic feet of liquefied natural gas per day (Bcf/d). Companies need a special license to export LNG to countries without a U.S. free-trade agreement and it's unclear how Trump's tariff policies would impact that.

Woodside, however, added that it has an arrangement that means it can defer tariff payments until each train, or liquefaction unit, is completed.

The company earlier this month entered a binding agreement to sell a 40% stake in Louisiana LNG to investment firm Stonepeak, which would invest $5.7 billion in a project that is moving closer to a final investment decision (FID).

Under the transaction, Stonepeak will provide $5.7 billion toward the expected capital expenditure for an initial three trains. Woodside will remain the sole operator.

"The accelerated capital contribution from Stonepeak enhances Louisiana LNG returns, reduces Woodside's capital commitments and strengthens Woodside's near-term capacity for shareholder distributions," said O'Neill.

Engineering firm Bechtel (Reston, Virginia) started engineering, procurement, and construction work on the initial three trains in October. In January, Baker Hughes Company (NASDAQ:BKR) (Houston) signed an agreement to supply eight gas turbines and compressors and other infrastructure for liquefaction operations.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can click here for a full list of detailed reports for projects related to Louisiana LNG.

Woodside has targeted 2029 as a potential start date for first exports from Louisiana LNG. The company on Wednesday reported first quarter revenue of $3.32 million represented a 5% decline from the prior quarter, a decline the company blamed on lower production and lower commodity prices.

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