Australia’s Woodside Energy said on Wednesday it has agreed to explore opportunities to collaborate with Saudi Aramco, which might take a stake in its $17.5 billion Louisiana liquefied natural gas project.
Shares in Australia’s top gas producer surged nearly 4% after the announcement.
The agreement, which could also see Aramco secure LNG supply, was a “demonstration of the ongoing interest Louisiana LNG is generating among high-quality potential investors,” Woodside CEO Meg O’Neill said in a statement.
Woodside in April gave its final approval for the project, confident that a pro-fossil fuel U.S. administration and strong demand would give it competitive returns.
The three-train, 16.5 million tonnes per year project is expected to start producing LNG in 2029.
Woodside has also sold a 40% interest in the company holding the infrastructure assets for the project to U.S. investor Stonepeak for $5.7 billion.
MST Marquee senior energy analyst Saul Kavonic said a buy-in from a “quality partner” like Aramco would validate the project’s worth to the market.
“Aramco aren’t doing this just for a few percent of a million tons … when they go into something, they go big,” he said.
Aramco and Woodside are also looking at collaborating in lower-carbon ammonia.
Kavonic also said he expects Woodside to take on additional equity partners based in Asia. Woodside has held talks with buyers such as Tokyo Gas and Japan’s JERA.
