Why fund managers are split on Woodside Energy's LNG growth plan

Woodside Energy is targeting a doubling of LNG output through its Louisiana LNG project, but the heavy capital expenditure required has split fund manager opinion.

3 Jul 2026 · 6 min read

LNG and oil producer Woodside Energy Group is targeting a doubling of LNG output to around 40 million tonnes per annum over the next five to seven years, according to Leithner & Company's May 2026 Article, which detailed how the fully-permitted Louisiana LNG project, following Woodside's April 2025 final investment decision, has become a core pillar of that growth alongside the long-running North West Shelf project.

A heavy capital expenditure period ahead of major project start-ups

Leithner & Company's report detailed the scale of Louisiana LNG: a permitted capacity of 27.6 million tonnes per annum, almost double the North West Shelf's current output, with a foundation phase completing by 2029 producing 16.5 million tonnes per annum, underpinning Woodside's ambition to become a global top-three LNG producer generating 5-7.5% of global supply by the early 2030s. Ten Cap's April 2026 Monthly Report took a more cautious near-term view, moving underweight as the company enters a period of declining production alongside elevated capital expenditure requirements, a concern Investors Mutual Limited's June 2026 Article shared directly, rating the stock a sell given the roughly US$10 billion Louisiana LNG capital commitment plus a further roughly US$5 billion for a Mexican project over the next three years.

LNG is a high proportion of energy these days, about 3.5% of global energy demand, and to fix those plants like in Qatar we're talking 3 to 5 years to get them back to name plate. The path back to normality in pricing is going to be a lot longer.

— Wilson Asset Management, Presentation, May 2026

Wilson Asset Management's May 2026 Presentation set out the bullish case built around energy security concerns: LNG contracts are priced off a slope over the oil price, and in times of stress that slope can jump from around 10-11% to 15-16%, with every 1 percentage point move on a 10 million tonne per annum contract worth around $1.2 billion over its lifetime, making Australian LNG producers a leveraged, safe-jurisdiction way to play a potentially two-decade period of stronger pricing. Yarra Capital Management's April 2026 Monthly Report maintained an overweight position despite the stock underperforming that month as spot LNG prices fell sharply even while oil prices rose, remaining attracted to Woodside's schedule to increase production by more than 30% over the following two years.

What managers are watching next

Pendal Group's May 2026 Newsletter flagged a specific domestic policy risk: the federal government's introduction of a 20% gas reservation policy from 1 July 2027, which grandfathers existing contracted volumes but is likely to weigh on domestic gas prices, with Woodside among the most exposed companies. With Pendal's other May 2026 report confirming Scarborough's start-up remains on track for the fourth quarter, the balance between near-term capital intensity and the medium-term production growth from Scarborough and Louisiana LNG remains the central debate dividing managers on the stock.