Woodside Acquires Tellurian to Expand Global LNG Presence

Woodside Energy Group, Australia’s leading oil and gas producer, has announced a significant step in its expansion strategy by acquiring U.S.-based Tellurian for approximately $1.2 billion.

This acquisition includes Tellurian’s fully permitted and advanced-stage Driftwood LNG export project near Lake Charles, Louisiana.Under the terms of the deal, Woodside will pay an all-cash price of $900 million, or $1 per share, which is a 75 percent premium on Tellurian’s share price.

This provides a substantial immediate return for Tellurian’s investors while mitigating the risks and costs associated with the development project. For Woodside, this acquisition is a major growth opportunity, significantly enhancing its footprint in the U.S. market.

Strategic Positioning and Development Progress for Woodside

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” said Woodside CEO Meg O’Neill.

This deal complements Woodside’s existing 10 Mtpa of equity LNG production in Australia by adding a scalable U.S. development project. It will enable Woodside to better serve global customers and optimize marketing opportunities across both the Atlantic and Pacific Basins.
Construction on the Driftwood site, which began in March 2022, is being handled by Bechtel Energy under an Engineering, Procurement, and Construction (EPC) contract. The project is targeting a final investment decision (FID) by 2025, with phase one aiming to be operational by 2026 or 2027.

Although Tellurian faced challenges and underwent a strategic repositioning in December 2023, the fully permitted project is exempt from the current moratorium on new licenses under the Biden administration.

Once complete, Driftwood could triple Woodside’s current export capacity, contributing nearly six percent to the global LNG market.

Leveraging Strategic Relationships

Work is progressing on phase one of the Driftwood project, which includes two LNG plants with an export capacity of up to 11 Mtpa. Phase two is planned to add an additional 5.5 Mtpa.

Woodside expects to finalize the acquisition in the fourth quarter of this year and aims for phase one’s FID readiness by early 2025.Woodside plans to leverage its strong relationships with Bechtel, which is also managing its Pluto Train 2 project in Australia, as well as with Baker Hughes and Chart.

Analysts believe Woodside’s market strength will bolster Driftwood, addressing concerns over its proposed long-term contracts linked to volatile Asian and European LNG spot prices. This acquisition also aligns with Woodside’s broader strategy, which includes a $5 billion investment in new energy projects over the next five to six years.

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