Woodside Energy has closed one of the year’s most significant energy partnerships, selling stakes in its Louisiana LNG project to Williams Companies for USD 378 million in a transaction that slashes the Australian giant’s capital requirements by nearly USD 2 billion.
The deal marks Williams’ first venture into LNG production. It also signals growing confidence in America’s position as a global natural gas powerhouse.
Under the agreement, Williams acquires a 10 per cent interest in Louisiana LNG LLC and an 80 per cent stake in Driftwood Pipeline LLC. The partnership brings Woodside’s total project capital expenditure down to USD 9.9 billion from USD 11.8 billion.
A Strategic Alliance Built on Infrastructure Strength
Williams operates more than 33,000 miles of pipeline across 24 US states. The Oklahoma-based company will now construct and operate the Line 200 pipeline connecting the Louisiana LNG terminal to its existing network.
Figure 1: Williams pipeline network map
Key elements of the partnership include:
- Williams securing 1.6 million tonnes per annum of LNG production
- Access to Williams’ Sequent Energy Management platform for gas sourcing
- Shared operational oversight between both companies
- First LNG production targeted for 2029
Woodside CEO Meg O’Neill highlighted Williams’ track record in US natural gas infrastructure. “Williams’ leadership in natural gas infrastructure brings complementary capabilities that enhance the Louisiana LNG project,” she stated.
Capital Relief Amid Market Uncertainty
The transaction provides immediate financial benefits for Woodside Energy, which has seen its share price fluctuate amid global energy market volatility.
The USD 250 million base payment reflects Williams’ contribution to acquisition and development costs. An additional USD 128 million covers proportionate capital reimbursement since 1 January 2025.
For Williams CEO Chad Zamarin, the deal advances the company’s “wellhead to water” strategy. This approach integrates upstream production with midstream transport and LNG export capabilities.
Louisiana LNG Project Takes Shape
Located along the Calcasieu Ship Channel in Louisiana, the project received final investment decision approval in April 2025. The facility sits adjacent to established natural gas infrastructure and export terminals.
Figure 2: Louisiana LNG facility
The location offers significant advantages:
- Access to prolific US shale gas basins
- Established port and shipping infrastructure
- Proximity to Gulf Coast export terminals
- Connection to Williams’ extensive pipeline network
Woodside retains majority ownership and operational control of Louisiana LNG. The company holds 90 per cent of the LNG facility and 20 per cent of the pipeline assets.
Market Dynamics Favour US LNG Growth
The Woodside-Williams partnership emerges as global LNG markets prepare for major supply expansion. The International Energy Agency forecasts demand growth accelerating to 2 per cent in 2026.
Asia Pacific markets, particularly China and India, drive this expansion. Both nations are building import infrastructure to transition away from coal-fired power generation.
North American LNG exports are positioned to capture significant market share. US production benefits from low domestic gas prices linked to Henry Hub pricing, offering competitive advantages over rival suppliers.
JP Morgan Research projects global LNG supply capacity increasing by approximately 350 billion cubic metres by 2030. North America and Qatar lead this expansion.
Energy Sector Performance Context
Woodside’s strategic moves come amid mixed performance for Australian energy stocks. The company has navigated regulatory challenges, including recent controversies over its North West Shelf gas project extension.
The Louisiana partnership demonstrates Woodside’s commitment to diversifying beyond its Australian operations. The company’s international expansion strategy aims to balance domestic regulatory pressures with global growth opportunities.
Williams shares traded at USD 46.87 following the announcement. Woodside Energy shares on the ASX responded positively to the capital relief news.
Infrastructure Integration Drives Value
The partnership leverages Williams’ Sequent Energy Management platform, which handles more than 7 billion cubic feet per day of gas marketing and optimisation.
This integrated approach addresses one of LNG’s key challenges: securing reliable, cost-effective feedstock supply. Williams’ existing relationships with Haynesville and Permian Basin producers provide competitive sourcing advantages.
The gas supply team will be Williams-led with Woodside secondees providing oversight. This structure aims to balance operational efficiency with strategic alignment between partners.
Looking Ahead
Both companies face execution challenges ahead. Construction timelines for major LNG projects often stretch beyond initial estimates. Supply chain pressures and skilled labour shortages could impact delivery schedules.
Global LNG markets also face uncertainty. Potential oversupply from 2027 onwards could pressure margins. European demand remains uncertain as the continent accelerates renewable energy deployment.
Despite these headwinds, the Woodside-Williams partnership positions both companies to benefit from Asia’s growing appetite for cleaner-burning fossil fuels. The transition from coal to natural gas in developing economies creates sustained demand for decades.
The Louisiana LNG project now enters its construction phase with strengthened financial backing and operational capabilities. Whether it delivers on its 2029 timeline will test both partners’ execution abilities in an increasingly competitive global market.
