Stay informed with free updates
Simply sign up to the Oil & Gas industry myFT Digest — delivered directly to your inbox.
Woodside Energy, Australia’s largest energy company, has cemented a US push with an agreement for a New York-based private equity firm to provide $5.7bn in funding for a key liquefied natural gas development in Louisiana.
Infrastructure-focused Stonepeak will acquire a 40 per cent stake in Louisiana LNG, previously called Driftwood, which requires 150 kilometres of pipelines and will have a capacity to produce 27.6mn tonnes of natural gas each year.
Woodside will look for more equity partners in the projects, but plans to retain at least a 50 per cent stake for the time being. The deal was announced as Australian markets opened sharply lower, due to Trump administration tariffs provoking fears of a global recession.
Mining and oil and gas stocks were the worst hit on the ASX. Woodside shares slumped 7 per cent despite the positive US deal news, which dispelled concerns that Woodside could struggle to find partners for the Louisiana development.
The stake sale is the latest in a series of transactions in which companies partner with private equity groups to bankroll large infrastructure projects, harnessing their ability to raise large amounts of debt.
Last year, Apollo Global Management invested $5bn for a 49 per cent stake in a new Intel manufacturing facility in Ireland, while Stonepeak partnered with Dominion Energy to fund an offshore wind project off the coast of the US state of Virginia.
“This transaction further confirms Louisiana LNG’s position as a globally attractive investment set to deliver long-term value to our shareholders,” said Meg O’Neill, chief executive of Woodside, in a statement on Monday.
The Perth-based company, which inherited US assets when it merged with BHP’s oil and gas business in 2022, acquired Tellurian — a struggling US LNG developer — last year for $1.2bn, as it looked to transform itself into a global powerhouse in the gas market and reduce its dependence on Australian exports.
Saul Kavonic, an analyst with MST Marquee, said the Stonepeak deal was important to alleviate concerns of balance sheet pressure on Woodside, but it still needed to strike more stake sales and offtake deals for future gas to justify the huge investment.
“The Stonepeak sell-down is effectively an off-balance-sheet finance package. It does not provide a valuation readthrough,” he said.
The deal preceded the election of Donald Trump, who has said he wants more US oil and gas development. O’Neill said in February that Australia “loses on every front” in terms of investment in new energy developments, given the speed of approval of projects in countries like the US.
Stonepeak oversees $72bn of assets under management and has specialised in infrastructure investments.
Mizuho and Santander, and law firms Simpson Thacher & Bartlett and Paul Weiss, served as advisers to Stonepeak, while Woodside was advised by RBC Capital Markets, Evercore and Norton Rose Fulbright.
