Woodside has head start with LNG even if Trump delivers ramp-up in US developments
Woodside has a head start over potential rivals with its Louisiana LNG development even if Donald Trump delivers on his promise to ‘drill baby, drill’.
Woodside has a head start over potential rivals with its Louisiana development even if Donald Trump delivers on his promise to “drill baby, drill”, the company’s chief executive Meg O’Neill has declared.
The election of President Trump for a second term has cast a shadow over Woodside’s US expansion plans, with the US expected to approve a spate of new developments amid a broad embrace of fossil fuels.
President Trump has said his administration will immediately lift a suspension imposed by Joe Biden on new LNG development. That was a key rationale of Woodside’s when it announced its acquisition of Driftwood from US LNG company Tellurian in a deal worth $US1.2bn ($1.8bn).
The buyout catapulted it into one of the world’s biggest LNG players. Woodside has subsequently renamed Driftwood to Louisiana LNG.
But Ms O’Neill said the company would continue to enjoy a head start over rivals.
“The thing that was always appealing about Louisiana LNG is that it is fully permitted up to the capacity of the site. So it’s fully permitted up to 29.6 million tonnes (and) has not been impacted by the US approvals pause that was implemented earlier this year. We have heard from the Trump campaign that they intend to lift the pause as soon as they take office but that doesn’t change the fact that the regulatory offices need to perform a thorough evaluation of any application,” Ms O’Neill told investors in Karratha, Western Australia.
“So we have that advantage over many of the other projects.”
Ms O’Neill reaffirmed Woodside’s commitment to making a final investment decision on Louisiana in the first quarter of 2025, though many expect this will be a formality.
The expected green light has, however, split the market. Although all agree Woodside will be able to broaden its global exposure with the US development, some have questioned the capacity of the company to keep delivering its returns to shareholders while making significant investments like Louisiana.
Woodside in August announced it agreed to purchase a low-carbon ammonia production facility in Texas from US company OCI Global in a deal worth $US2.35bn.
Ms O’Neill said Woodside could deliver its two pillars, shareholder returns and a strong balance sheet.
Dividends are important to Woodside’s shareholder registry. A large percentage of shareholders are retail investors, which prioritise dividends. Any sign of a movement in Woodside’s dividend policy would add pressure to the share price.
Institutional investors in contrast are keen on the company securing long-term investment to help elevate the share price.
Woodside shares are trading at around $24 a share – the lowest in nearly three years.
Market sentiment could be improved should Woodside secure a deal to selldown its exposure in Louisiana LNG.
Ms O’Neill declined to comment on reports Woodside is in talks with Tokyo Gas over an equity stake sale in Louisiana LNG.
The reporter travelled to WA as a guest of Woodside
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