Australia's Woodside Energy Group said it signed a revised lump-sum, turnkey EPC contract with contractor giant Bechtel to develop the renamed Louisiana LNG liquefied natural gas export production project near Lake Charles, La. The notice to proceed, announced Dec. 4, comes two months after the Perth-based oil and gas company announced a major U.S.expansion in buying original project developer, Houston-based Tellurian Inc., for more than $900 million.
Woodside said it aims to sell a 50% stake in the plant, which has a total permitted LNG capacity of 27.6 million tons per year if fully built out and had been called Driftwood LNG.
The EPC contract will cover "foundation development" for the project's first three of potentially five production trains—with a capacity of 16.5 million tpy, Woodside said, adding that 11 million tpy would be built in Phase 1 and 5.5 million tpy in Phase 2. Also part of the project are three LNG storage tanks, marine facilities for loading LNG carriers, associated infrastructure and support facilities and a feedgas pipeline. The firm estimated construction of the two phases at $900 to $960 per ton, which it said is "unchanged" from the time of Tellurian's purchase, which began in July.
The developer said a final investment decision would be made in first quarter 2025. It noted up to $1.3 billion in project investment from December through that quarter,
Bechtel, which did not announce the revised award itself, has worked at the Gulf Coast site in Calcasieu Parish, La., since 2022 on what ENR reported at the time was set to be an estimated $25-billion complex to be built under a $15.5-billion fixed-price contract.
Revised contract terms were not disclosed, and ENR could not confirm them by web posting time nor a statement attributed to a firm spokesperson that the project now is a $27-billion complex for the two phases.
Early Mover
Woodside CEO Meg O’Neill previously stated in announcing the Tellurian purchase that "site civil works are well advanced," adding more recently that construction of all pilings is done.
The project received construction approval in 2019 from the Federal Energy Regulatory Commission, and Woodside noted in a media comment that it has all needed permits, including its U.S. Energy Dept. export license, but has not "provided guidance" on a project completion date.
“Louisiana LNG is positioned to provide LNG into the growing global market and ... we continue to move at pace," O'Neill said. "In a short period of time, we have completed the acquisition, secured competitive revised EPC pricing that covers all three trains" and has "strong interest from potential project partners."
The project has faced challenges in past efforts to secure project clients and backers.
Woodside confirmed new talks with off-takers and potential investors, but did not name any. Announcements will be "concurrent with the final investment decision at the latest," O'Neill told Reuters, also noting "some inflationary pressures, both in the supply chain and the labor market."
O'Neill termed the LNG complex, "an advantaged project that ... has Bechtel as the EPC contractor. The competitive pricing and schedule certainty we have now secured compounds this advantage in the current uncertain market environment for competing projects.”
The project also has faced legal action from environmental groups challenging some of its federal and state approvals. A federal appeals court in New Orleans rejected in 2023 opponents' challenge of its US Corps of Engineers clean water permits; FERC also denied their petition this year to reconsider the agency's decision to extend construction approval to 2029.
The Louisiana project boosts Woodside Energy's U.S. assets—which also include an Oklahoma project to produce green hydrogen through electrolysis, for which early design is completed, and a facility in Texas purchased in August for $2.35 billion to produce blue ammonia.
Australia's Western Australia state also approved on Dec. 12 the firm's environmental request to extend operation of the North West Shelf LNG terminal until 2070, which advocacy groups opposed, although the facility now has to report its greenhouse gas emissions every five years, said Reuters.
