Woodside Energy (NYSE:WDS) has officially approved the construction of its massive Louisiana LNG project, committing an estimated $17.5 billion to develop the export facility. The decision marks a significant step in the company’s strategic bet on the enduring global demand for liquefied natural gas and the United States’ emerging role as a key supplier of low-cost, reliable energy.

The project, which Woodside acquired last year through its purchase of Tellurian, is expected to begin production in 2029. It comes as global energy markets continue to rebalance post-pandemic and amid the war in Ukraine, with LNG positioned as a transitional fuel in the shift from coal and oil to cleaner energy sources.

Woodside said the Louisiana LNG terminal will be developed in phases, beginning with the construction of three liquefaction units capable of producing up to 16.5 million metric tons of LNG per year. However, the project has been fully permitted to expand its capacity to 27.6 million metric tons per year, should market conditions support further development.

As energy companies face increased scrutiny over capital spending and environmental impact, Woodside emphasized the project’s financial viability. The company estimates the development will yield an internal rate of return above 13%, with the first phase alone projected to generate approximately $2 billion in net operating cash annually throughout the 2030s.

To help manage costs and reduce strain on its balance sheet, Woodside earlier this month announced it had agreed to sell a 40% stake in the infrastructure entity supporting the Louisiana LNG project to private equity firm Stonepeak for $5.7 billion.

That move is expected to provide critical early funding. “The contribution would come early, supporting 75% of capex in 2025 and 2026,” the company said.

With global energy demand still rising, especially in Asia and Europe, Woodside’s move reflects a broader industry trend of balancing investment in fossil fuels with longer-term net-zero ambitions. The LNG project not only enhances energy security in allied nations but also allows the U.S. Gulf Coast to continue cementing its role as a major global LNG hub.

Originally reported by MSN News.