Woodside Energy (ASX:WDS) continues to reinforce market sentiment that it is moving towards a "Life After Australia" in the US. The latest indication came during a major investor briefing held on Monday in New York, where it was clear the company is aiming for faster growth in the US than anywhere else.
In the past few years, the company has committed or spent several billion dollars on US projects and initiatives, with billions more to follow if these projects come to fruition. Some analysts estimate the potential investment could reach $30 billion in North America alone by the end of the decade.
Key projects include the Driftwood LNG export project in Louisiana, a low-emissions ammonia plant in Texas, the $US7.2 billion ($10.7 billion) Trion oil project in Mexico, and the Calypso development near its producing areas in Trinidad and Tobago. Woodside also has offtake agreements with two LNG suppliers in the US: one in place with Corpus Christi and another planned with Commonwealth.
By 2030, much of Woodside’s growth could stem from the US, although the most notable deal—the $1.2 billion purchase of Tellurian, the developer of the Driftwood project—is not an investment in an active LNG business but in a venture that will aggregate supplies, process them, and ship them from the US Gulf of Mexico.
On Monday, CEO Meg O’Neill stated that the company is in discussions with potential partners for the Driftwood liquefied natural gas project on the US Gulf Coast. Analysts suggest the most logical partners will be gas suppliers without existing LNG contracts, potentially exchanging equity for natural gas supplies to the proposed LNG processing trains, as well as end-users, traders, or pipeline companies seeking markets for uncommitted gas supplies.
Woodside reported that interest in Driftwood has come from infrastructure developers and strong counterparties in Asia and Europe. O'Neill added that the project has drawn attention from infrastructure developers and partners in Asia and other regions, with the company looking to collaborate with gas producers, pipeline companies, and firms that share its vision for LNG.
Woodside plans to make a final investment decision once the partnership details are finalised, though an agreement is unlikely before the first quarter of 2025. After that, Woodside intends to issue Bechtel a notice to proceed.
One of Driftwood’s most appealing aspects is that it has not been affected by the Biden administration’s decision to pause the approval of LNG export applications. This, O'Neill said, gives Woodside a year’s advantage over other projects.
She also noted that while global LNG supplies are expected to increase towards the end of the decade, this will likely not affect demand or prices. She predicted that higher production will be balanced by growing demand, making a projected supply glut unlikely.
