Williams Invests $378 Million In Woodside's LNG Terminal-Pipeline Venture
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Australia-based Woodside Energy Group Ltd (NYSE:WDS) solidified its strategy for the Louisiana LNG initiative by closing a deal with U.S. natural gas company Williams Companies Inc (NYSE:WMB).
This strategic alliance sees Williams acquiring a 10% stake in the Louisiana LNG LLC. It also bought an 80% stake, including operatorship, of Driftwood Pipeline LLC.
Williams paid a total of $378 million — $250 million for the stakes, plus proportionate capital reimbursement since the effective date.
This move is a critical step for Woodside, securing capital and commitments for future LNG supply.
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Williams is committing approximately $1.9 billion as its share of capital expenditure for both the LNG facility and the pipeline. Additionally, the company assumes an obligation to purchase 10% of the future LNG production volumes.
The company currently manages over 33,000 miles of pipelines across 24 U.S. states. It aims to construct and operate the Line 200 pipeline connecting to the Louisiana LNG Terminal.
Woodside CEO Meg O’Neill expressed excitement about the collaboration, highlighting Williams’ leadership in U.S. gas infrastructure. O'Neill noted, “The bringing together of Woodside’s proven track record in developing and operating LNG facilities and global marketing, and Williams’ expertise in pipelines and gas sourcing, creates an energy partnership that has the combined capability to realize opportunities for long-term global energy demand.”
The deal immediately reduces Woodside’s projected total capital expenditure for the Louisiana LNG Project to $9.9 billion from the previous $11.8 billion estimate at final investment decision (FID).
Williams' total share of LNG production from the facility will be 1.6 million tonnes per annum (Mtpa), covered by an LNG Sale and Purchase Agreement (SPA) for approximately 1.5 Mtpa, plus the proportionate benefit from an existing 1.0 Mtpa SPA with Uniper.
Price Action: WMB shares are trading 3.46% lower at $60; WDS is up 4.22% at $15.92 on Thursday’s last check.
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Image: Shutterstock; Williams; Edited with Canva