Woodside Energy Acquires Tellurian Stock, Driftwood LNG Development

Woodside Energy signed a definitive agreement to purchase Tellurian’s issued and outstanding common stock, including the company’s Driftwood LNG development opportunity on the U.S. Gulf Coast. The transaction will be an all-cash payment of approximately $900 million, with an implied enterprise value of about $1.2 million.

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG leader,” said Meg O’Neill, CEO of Woodside Energy. “It adds a scalable U.S. LNG development opportunity to our existing 10 mtpa of equity LNG in Australia. Having a complementary U.S. position would allow us to better serve customers globally and capture further marketing optimization opportunities across both the Atlantic and Pacific Basins.”

Driftwood LNG is a fully permitted, pre-final investment decision (FID) development opportunity in Louisiana—the plan includes five LNG trains through four phases, with a total permitted capacity of 27.6 mtpa. Foundation development contains two phases: Phase 1 (11 mtpa) and Phase 2 (5.5 mtpa). Phase 1 FID-readiness is targeted for Q1 2025.

Model of Driftwood LNG upon completion; Image Credits: Business Wire

“The Driftwood LNG development opportunity is competitively advantaged,” said O’Neill. “Woodside expects to leverage its global LNG expertise to unlock this fully permitted development and expand our relationship with Bechtel, which is the EPC contractor for both Driftwood LNG and our Pluto Train 2 project in Australia.”

The development received a non-free trade agreement export authorization and extended its Federal Energy Regulatory Commission authorization. For Phase 1 and 2, Woodside expects development costs of approximately $900-$960 per ton. Bechtel, an LNG contractor, received a lump-sum turnkey contract for Driftwood LNG. Project construction has commenced, with pilings for Trains 1 and 2 complete, foundation work in progress, and pilings underway for LNG tanks.

“Through this acquisition, we are delivering on our strategy to thrive through the energy transition,” added O’Neill. “Woodside believes that LNG will play a key role in the energy transition and is well-positioned to deliver the energy the world needs while delivering significant value to our shareholders.”

In March 2024, Woodside Energy sold a 10% non-operating participating interest in the Scarborough Joint Venture—a natural gas field development project—to LNG Japan. Woodside previously established a strategic partnership with LNG Japan on Aug. 8, 2023, that granted LNG Japan equity in the Scarborough Joint Venture, potential LNG offtake from the site, and collaboration on new energy opportunities. Woodside received US$910 million for LNG Japan’s equity in the project, which covered the purchase price, reimbursed expenditure, and escalation.

At the beginning of July, Woodside Energy awarded Baker Hughes a 10-year services frame agreement (SFA) to support its Australian LNG operations. According to the SFA, Baker Hughes will supply spare parts and field service resources for onsite turbomachinery maintenance and upgrades, refurbishment, and digital asset performance services.

The recent agreement adds to an ongoing LNG-based strategic partnership between Baker Hughes and Woodside Energy. In 2021, Baker Hughes delivered gas turbines and centrifugal compressors to support Woodside’s Pluto LNG train 2 project in Western Australia. Also, in 2022, the companies signed a memorandum of understanding to produce decarbonization solutions using Baker Hughes’ carbon management and climate technology.