How Woodside’s Louisiana LNG FID and Stonepeak Deal Unlock New Growth

Operational Momentum and Production Growth

Woodside Energy has delivered a solid second quarter for 2025, with production climbing 2% to 50.1 million barrels of oil equivalent (MMboe). This growth was underpinned by the Sangomar field’s exceptional performance, which maintained near-plateau production at 101,000 barrels per day with 99.6% reliability. The company’s diversified portfolio continues to generate strong revenue, with a realised LNG price of $62 per barrel of oil equivalent, reflecting strategic pricing linked to gas hub indices and optimisation efforts.

Louisiana LNG Project, A Strategic Leap Forward

The highlight of Woodside’s quarter is the final investment decision (FID) for the Louisiana LNG Project, a three-train facility with a capacity of 16.5 million tonnes per annum. This milestone unlocks significant long-term value and positions Woodside as a global LNG powerhouse. Crucially, Woodside completed the sale of a 40% stake in the project’s infrastructure to Stonepeak for approximately $1.9 billion, with Stonepeak assuming 75% of capital expenditure since January 2025. This partnership notably reduces Woodside’s capital risk and enhances financial flexibility.

Woodside also secured long-term LNG sale agreements with Uniper and signed a collaboration agreement with Aramco, which includes potential equity participation and LNG offtake from Louisiana LNG, as well as cooperation on lower-carbon ammonia initiatives. These deals underscore the project’s strategic importance and Woodside’s commitment to expanding its global footprint.

Project Progress and Cost Discipline

Woodside’s major projects remain on track, with the Scarborough Energy Project 86% complete and targeting first LNG cargo in the second half of 2026. The Trion Project offshore Mexico is 35% complete, aiming for first oil in 2028. Meanwhile, the Beaumont New Ammonia Project is nearing completion at 95%, with first ammonia production expected late this year.

Operational efficiency is evident in Woodside’s decision to lower its full-year unit production cost guidance to $8.0-$8.5 per barrel of oil equivalent, down from $8.5-$9.2. This reflects strong production and cost performance in the first half of 2025. The company also demonstrated capital discipline by issuing $3.5 billion in senior unsecured bonds in the US market, which were heavily oversubscribed, and maintaining liquidity of approximately $8.4 billion at quarter-end.

Portfolio Management and Sustainability Focus

Woodside completed the divestment of its Greater Angostura assets for $259 million, streamlining its portfolio and strengthening its balance sheet. The company also exited the H2OK hydrogen project due to industry challenges, recognizing an impairment loss of about $140 million pre-tax. This move reflects Woodside’s disciplined approach to portfolio management amid evolving energy markets.

On the sustainability front, Woodside remains on track to meet its target of reducing net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025. The company is advancing carbon capture and storage projects and new energy initiatives, including participation in the NeoSmelt Project aimed at lower-carbon iron production.

Looking Ahead

While Woodside’s operational and financial performance is robust, the company faces ongoing challenges such as legal proceedings related to the Scarborough project and increased decommissioning costs offshore Australia. These factors, along with market dynamics and regulatory developments, will be critical to monitor as Woodside progresses its ambitious growth and sustainability agenda.