Title: Woodside in talks to sell stake in Louisiana LNG, sources say
MELBOURNE, Feb 16 (Reuters) – Woodside Petroleum Ltd, the Australian energy company, is in talks to sell a significant stake in its Louisiana LNG project to a potential buyer, according to sources familiar with the matter.
The move comes as global interest in liquefied natural gas (LNG) reaches a high point, with prices soaring on the back of strong demand from Asia and supply chain disruptions.
Woodside, which has a 50% stake in the Louisiana LNG project, is looking to sell a minority stake in the venture to raise capital and de-lever its balance sheet. The company has been actively exploring options to monetize its non-core assets in recent years.
The potential sale is part of a broader trend of consolidation in the global LNG market, with many energy companies seeking to divest non-core assets to focus on higher-margin businesses.
The interest in Louisiana LNG has been sparked by the project’s potential to produce up to 10 million tonnes of LNG per year, making it one of the largest greenfield projects in the region. The facility, located in Geismar, Louisiana, is expected to come online in 2025.
The company is in discussions with several potential buyers, including major energy companies, private equity firms, and sovereign wealth funds. However, the final agreement is yet to be reached, and the deal is still in the early stages of negotiation.
Industry analysts believe that the sale will be a significant opportunity for potential buyers, given the project’s attractive long-term contracts and strong track record of delivery.
“This is a great opportunity for Woodside to unlock value from its stake in Louisiana LNG,” said WoodMac’s Andrew Lee, a market analyst. “The project has strong potential, and the company’s minority stake could fetch a premium price in a strong market like this.”
The Louisiana LNG project has a 15-year off-take agreement with BP, which will purchase a significant portion of the project’s LNG output. The deal is expected to provide stable revenue streams for both parties and further boosts the project’s value.
If the sale goes ahead, Woodside will use the proceeds to reduce its debt, which currently stands at around $3.5 billion. The company has a net debt-to-equity ratio of 30%, which is above its target of around 20%.
Woodside has a history of selling non-core assets to raise capital and focus on its core businesses. In 2020, the company divested its stake in the Scarborough gas project for $1.57 billion.
The sale of the Louisiana LNG stake is Woodside’s latest attempt to rebalance its portfolio, aligning its asset base with its strategic priorities and risk appetite.
Reuters has contacted Woodside for comment, but the company has declined to comment on the matter.
The sale of the Louisiana LNG stake is expected to be a closely watched deal in the energy market, with many industry players keenly following the developments.
As the market continues to watch the situation unfold, one thing is clear: Woodside’s decision to sell its stake in Louisiana LNG is likely to be a smart move, given the company’s growing need to reduce its debt and focus on its core businesses in a challenging commodity market.
(Reporting by Michael Smith; Editing by Sreekakumar Tenepalli)
