May 1 (Reuters) - S&P Global Ratings revised the credit

outlook for Australia's Woodside to "negative" from

"stable" on Thursday after the energy company reached a final

investment decision of $17.5 billion on its Louisiana liquefied

natural gas project.

Woodside deciding to proceed with the project without a

material sell-down of its offtake exposure has eroded ratings

headroom, the rating agency said.

However, the agency affirmed its 'BBB+' long-term issuer

credit rating and 'BBB+' long-term issue ratings on Woodside and

its senior unsecured notes.

Earlier this week, the Australian oil and gas company

approved a multi-billion dollar LNG project in Louisiana,

confident of a pro-fossil fuel U.S. administration and strong

demand.

This followed a 40% stake sell-down in the U.S. project to

U.S. infrastructure investor Stonepeak, which left Woodside with

a majority stake.

S&P said Woodside is exposed to the market risk of the whole

project compared with its current effective economic interest in

the project of 60%.

Woodside Chief Executive Officer Meg O'Neill reiterated this

week that the company is pursuing a further stake dilution in

the LNG project.

S&P expects Woodside's ratio of funds from operations to

debt to track at about 50% over the next few years.

Future ramp-ups at the Louisiana project are likely to

reduce cash flow, leaving the energy giant with very limited

capacity to accommodate weaker oil prices or cost overruns at

any of its major projects, the ratings agency said.