Woodside Energy has signed a major agreement with bp to supply natural gas for its Louisiana LNG project, marking a significant step in the development of the US$17.5 billion facility in Calcasieu Parish, United States.

This deal represents the initial tranche of a diversified feedgas portfolio, leveraging the project’s extensive interconnectivity to multiple producing basins and interconnecting pipelines.

Under the agreement, Louisiana LNG Gas Management LLC (GasCo), a wholly owned subsidiary of Louisiana LNG LLC, will purchase up to 640 billion cubic feet of gas from bp on a long-term basis, with deliveries to Line 200 set to begin in 2029.

GasCo will oversee the gas sourcing strategy to support the project’s operations.

Woodside CEO Meg O’Neill described the agreement as a key milestone: “Louisiana LNG is a compelling investment, expected to deliver significant cash generation and create long-term shareholder value.”

O’Niell stated that securing this gas supply agreement is an important step for the project.

“Woodside has a long history of successful collaboration with bp,” continued O’Niell.

“By drawing upon bp’s experience with MiQ certificates, we can access verifiably low methane intensity molecules for the Louisiana LNG project.

“This supports Woodside’s goals as a member in the UN Environment Programme’s OGMP 2.0 initiative.”

The Louisiana LNG project, Woodside’s largest investment to date, is expected to deliver an internal rate of return of 13 per cent with a payback period of seven years.

The facility will initially comprise three trains with a total capacity of 16.5 million tonnes per annum (mtpa), and is projected to boost Woodside’s global LNG portfolio to 24 mtpa by the 2030s — over 5 per cent of the world’s LNG supply.

Earlier this month, Woodside agreed to divest a 40 per cent interest in the facility to US infrastructure investor Stonepeak for US$5.7 billion, further supporting the project’s financing and development.