Woodside Energy (ASX:WDS) Sets Course for Growth with US$17.5 Billion LNG Project

April 29, 2025 02:40 PM AEST | By Team Kalkine Media

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Woodside Energy (ASX:WDS) Sets Course for Growth with US$17.5 Billion LNG Project — Image source: Shutterstock

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Highlights

Woodside Energy makes US$17.5 billion investment decision

Project to expand Woodside’s LNG production capacity significantly

Strong cashflow potential forecasted for the 2030s

Woodside Energy Group Ltd (ASX:WDS) has captured attention following a major investment decision concerning its Louisiana LNG development. As one of Australia's largest oil and gas players, this move could reshape its global standing in the liquified natural gas (LNG) sector.

The company has approved the final investment to develop a three-train facility with an annual production capacity of 16.5 million tonnes. First LNG production is targeted for 2029, marking a major milestone in Woodside's long-term growth plans. This development also highlights the strengthening outlook for ASX energy stocks, as major projects like this contribute to sector growth and investor confidence.

The total capital expenditure for the Louisiana project, including pipelines and management reserves, is forecasted at US$17.5 billion on a 100% ownership basis. A notable portion of the funding, US$5.7 billion, will be provided by Stonepeak through its investment in Louisiana LNG Infrastructure, covering 75% of the capital expenditure during 2025 and 2026. Woodside’s direct share of the total cost is anticipated at US$11.8 billion.

This significant project is expected to elevate Woodside's global LNG output to around 24 million tonnes annually by the 2030s. At that stage, the company would command over 5% of the world's LNG supply, positioning itself as a major force in the industry.

The facility is fully permitted for expansion up to 27.6 million tonnes per year, offering further growth potential in the future. This strategic move is aimed at meeting the strong and sustained demand for LNG across Asia and Europe, securing long-term relevance in global energy markets.

From a financial standpoint, Woodside (ASX:WDS) projects the development to deliver an internal rate of return exceeding 13%, with a payback period of approximately seven years. The Louisiana LNG foundation alone is forecasted to generate about US$2 billion in annual net operating cashflow during the 2030s. Full expansion could boost this figure to over US$8 billion annually.

In the broader market context, the Woodside share price has declined by around 28% over the past 12 months. Amidst cyclical energy pricing and evolving global energy demands, strategic developments like the Louisiana project could play a key role in the company’s future performance and operational resilience.

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