Australia’s Woodside Energy Group said it signed a revised turnkey EPC contract with contractor giant Bechtel to develop the Louisiana LNG export production liquefied natural gas project near Lake Charles, La. The notice to proceed, announced on December 4, comes two months after the Perth-based oil and gas company announced a major expansion into the United States, with its purchase of the original project’s developer Tellurian Inc. for more than 900 million dollars.
Woodside said it aims to sell a 50% stake in the plant, which has a total permitted LNG capacity of 27.6 million tonnes a year if fully built and named Driftwood LNG.
The EPC contract will cover “foundation development” for the first three of the project’s potential five production trains, with a capacity of 16.5 million tany, Woodside said, adding that 11 million tany would be built in Phase 1 and 5.5 million tany in Phase 2. Also part of the project are three LNG storage tanks, marine facilities for the loading of methane tankers, associated infrastructure and support facilities and a feed pipeline.
The developer said a final investment decision would be made in the first quarter of 2025. It pointed to up to $1.3 billion in investment in the project from December through the first quarter of 2025.
Bechtel, which did not announce the revised award itself, has been working on the Gulf Coast site in Calcasieu Parish, Louisiana, since 2022 in what ENR reported at the time was estimated to be a complex of $25 billion that would be built at a cost of $15.5. -Billion fixed price contract. The terms of the revised contract were not disclosed, and ENR could not confirm them by time of publication on the web or a statement attributed to a Woodside spokesman that the project is now a $27 billion complex for the two phases .
first movement
Woodside CEO Meg O’Neill previously said in announcing the October Tellurian purchase that “civil works at the site are well advanced,” adding more recently that construction of all pilings is complete.
The project received 10-year construction approval in 2019 from the Federal Energy Regulatory Commission, and it noted in a media release that it has all the necessary permits, but has not “offered guidance” on the date of completion of the project.
“Louisiana LNG is positioned to provide LNG to the growing global market and … we continue to keep pace,” O’Neill said. “Within a short period of time, we have completed the procurement and secured competitive revised EPC pricing covering all three trains and opened the data room with strong interest from potential project partners.”
Woodside confirmed talks with potential buyers and investors for the project, but did not name any. Those announcements will be “concurrent with the final investment decision at the latest,” O’Neill told Reuters. “There are some inflationary pressures, both in the supply chain and in the labor market,” he said.
O’Neill called the LNG complex “a project advantage that … Bechtel has as an EPC contractor. The competitive pricing and schedule certainty we have now secured increases that advantage in the current uncertain market environment for to competing projects”.
The project has also faced legal action from environmental groups challenging some of its federal and state approvals. But a federal appeals court in New Orleans in 2023 rejected a challenge by opponents of the U.S. Corps of Engineers’ clean water permits, and FERC denied their request to reconsider the agency’s decision to extend construction approval.
The Louisiana project adds to Woodside Energy’s US assets, which also include an Oklahoma project to produce green hydrogen through electrolysis, for which the initial design has been completed, and one in Texas that it bought from August for $2.35 billion to produce “blue” ammonia.
The Australian state of Western Australia also approved the company’s environmental application on Dec. 12 to extend the life of its North West Shelf LNG terminal to 2070, to which oppose advocacy groups, although the facility must now report its greenhouse gas emissions every five years, Reuters said. .
