Last week’s announcement by Perth, Australia-based Woodside Energy that it had reached a final investment decision (FID) to move ahead with its proposed $17.5 billion Louisiana LNG project represents the single largest greenfield energy investment in Louisiana’s history. More than that, Woodside Chief Operating Officer Daniel Kalms says it reflects a general business environment in the United States that is increasingly out-competing global rivals, and in the state of Louisiana, which under Governor Jeff Landry has evolved into the central hub of the LNG industry expansion.
A Competitive Economic Environment For LNG Investments
“We’ve had a relationship in Louisiana for almost two decades with our Gulf of America operations,” Kalms told me in a May 1 interview conducted in the company’s U.S. headquarters in Houston. “So, we already had a good base there. And then the new administration is supportive of our industry which is incredibly helpful as well.”
That change in administration has included President Donald Trump’s reversal of the Biden-era “pause” in permitting for new LNG projects, along with an administration-wide push to encourage growth in domestic energy resources in general and expansion of the LNG export industry specifically. While those and other Trump initiatives have been positive, it is also important to point out that the change of administrations was not the determining factor for Woodside’s decision to dedicate so much capital on U.S. LNG efforts.
The Louisiana LNG project is an evolution of Woodside’s buyout of Tellurian and what it called its Driftwood LNG development in July of 2024, when the eventual outcome of the November elections was anyone’s guess. Obviously, the U.S. business environment was plenty competitive then, enough for Woodside to risk the initial $900 million to execute the buyout.
Even better for Woodside, the Driftwood LNG project was not subject to the Biden pause because Tellurian had embarked on the permitting process in April, 2017, during Trump’s first presidency. Kalms confirmed that the fact that Tellurian had already managed to obtain all needed federal and state permits was a big plus in the decision to execute that transaction.
“The fact that Tellurian already had all their permits was one of the key factors for this project,” he says. “That meant that one element that would be an impediment was removed.”
The absence of any such impediments at the state or federal levels left Woodside with the ability to move from initial acquisition to FID in just 7 months, almost lightning speed with such a major capital outlay involved. The company committed $1.3 billion in initial capital in December to kick start the project in anticipation of getting to the point of FID.
“We were quite confident that we would get there,” Kalms says. “And when we look at the outlook, we’ll be constructing for the next four years, which will be during a period where there’s a lot of support for our industry. It’s quite a good time to be building LNG. I think that we are advantaged and ahead of the pack.”
Mitigating For Risks Over Tariffs, LNG Ships
Tariffs are another area of potential concern for any major energy project at this moment in time, especially tariffs related to sourcing steel and aluminum. Kalms says his management team did see potential for tension between the U.S. and China and planned accordingly.
Kalms pointed out that roughly 25% of the $17.5 billion capital investment applies to equipment and materials, and, of that 25%, half is sourced in the United States. The remainder is sourced internationally from countries other than China.
Another key reliever of major stress over tariffs comes from the fact that Louisiana LNG is sited in the state’s foreign trade zone (FTZ).
“Louisiana LNG operates in a foreign trade zone and that defers payment of any potential tariffs until at least 2029,” Kalms points out. “We don’t take that for granted, but it is really helpful for making the project internationally competitive.”
Woodside’s business planning and strategies have also eliminated concerns about a looming U.S. requirement going into effect in 2029 that will disallow the import or export of LNG on Chinese-flagged ships.
“Woodside controls its own shipping,” he emphasized. “We do source ships but what I would say is that there are many places where you can buy ships. We’ve had quite good relationships with yards in Korea. Hyundai, for instance, we’ve recently sourced ships from. Just like we talked about that sourcing strategy for steel, we also think about where we’re sourcing ships from.”
The Louisiana LNG Link To Trump Plans For Energy Dominance
During its construction phase in the coming years, Woodside says Louisiana LNG will support 15,000 jobs and will continue to support thousands of jobs once operational. Once fully online, the three planned initial production trains will have the capacity to export 16.5 million metric tons of LNG per annum (Mtpa). Assuming positive market factors prevail, Woodside has plans to add another pair of trains that would raise total capacity to 27.6 Mtpa.
Louisiana LNG stands to become a significant contributor in a key American growth industry which has become a central focus area in the Trump administration’s overall energy strategy. A recent S&P Global study commissioned by the U.S. Chamber of Commerce projects the LNG industry will add $1.3 trillion to US GDP between now and 2040, and will support almost 500,000 direct, indirect and induced US jobs. The study also found that progressing new projects like Louisiana LNG could avoid 780 million tons of greenhouse gas emissions globally between 2028 and 2040.
The findings by S&P Global are consistent with findings by other independent studies that U.S. LNG is significantly less carbon-intensive than coal and other alternative energy supplies. Louisiana LNG strengthens American LNG export capacity at a critical geopolitical moment, particularly as European allies seek long-term supply diversification. Woodside’s recent supply agreement with German utility Uniper reflects that growing transatlantic demand and strategic imperative.
For Woodside, the fact that its Louisiana LNG project helps satisfy the Trump administration’s imperative for a return to American Energy Dominance is an added bonus, and a fact that will no doubt be well received in the White House.
