Australia's Woodside Energy announced on Monday it has approved a $17.5-billion investment for the construction of a liquefied natural gas (LNG) plant in Louisiana.
It is the first financial go-ahead to construct a LNG plant in the US since President Donald Trump returned to office declaring an energy emergency and promising to unleash U.S. energy onto the world.
The decision will help the U.S. further strengthen its position as the world's largest exporter of the superchilled gas.
The plant will cost $1.5 billion more than the original price tag the company gave last year for the first phase of the project and days after it said it was assessing the impact of US tariffs and other trade measures on the project.
The project's three separate processing units, or trains, with a 16.5-million-ton-per-annum (Mtpa) capacity, are expected to begin production in 2029. The project has the potential to add two more LNG trains, taking its capacity to 27.6-Mtpa.
The investment will help Woodside deliver about 24-Mtpa from its worldwide LNG portfolio in the next decade, contributing to over 5% of global LNG supply, the company said.
The company also estimates the project will generate $2-billion in annual net operating cash in the 2030s, offering an internal rate of return of 13% and a payback period of seven years.
Stonepeak, an investor in the Louisiana LNG Infrastructure LLC, will put $5.7-billion towards the expected capex, with most of that money spent in the first two years of construction. Woodside's share of the construction costs will be $11.8-billion, the company said.
Woodside's greenhouse gas emission reduction targets remain unchanged after the final investment decision on the US project, the company said. 