Jera Co. Inc., one of the world’s largest LNG buyers, has secured a 15.1% stake in Woodside Energy Group Ltd.’s Scarborough project as it continues to look for stable long-term supply for Japanese power production.
Under the transaction, valued at $1.4 billion, Jera would obtain a non-operating interest in the Scarborough partnership and offtake an equity share of around 1.2 million metric tons/year (mmty) in liquefied natural gas cargoes from the project. The deal is targeted to close by the end of the year.
Jera and Woodside also signed a tentative supply agreement that could guarantee the Japanese company around 0.4 mmty of LNG from the project for 10 years starting in 2026.
“Scarborough is a world-class project which will provide reliable energy for our customers in the Asian region, including in Japan,” CEO Meg O’Neill said. “LNG continues to be an important energy source for Japan and one which supports the country’s decarbonisation ambitions.”
The Scarborough field is about 230 miles offshore Western Australia and estimated to hold natural gas reserves of 11.1 Tcf. It’s also key to Woodside’s plans to add an additional 5 mmty capacity train to Pluto, boosting its overall capacity to almost 10 mmty.
The investment agreement in Scarborough also gives Jera the option to take a 15.1% interest in the Thebe and Jupiter offshore fields and any other future developments that could tieback to Pluto LNG through the Scarborough project infrastructure.
Woodside has been working to stabilize supply to its Pluto LNG facility on the northwest coast of Australia with interconnection projects to process third-party gas, along with a tie-back to the Scarborough field.
The Australia-based exploration and production company sold a 10% stake in Scarborough last year to LNG Japan Corp., a joint venture of Sumitomo Corp. and Sojitz Corp. After the transaction with Jera is complete, Woodside will retain an almost 75% interest in the development.
The growth of Japan’s natural gas demand is expected to be impacted in the coming years by a return of nuclear generation and the buildout of renewable energy projects. However, Japanese firms have continued looking for long-term LNG supply opportunities in Australia, Indonesia and the United States after the government directed companies to secure strategic reserves of gas.
“Solving the world's energy issues requires deep collaboration to tackle challenges one by one with reliable partners,” Jera Global CEO Yukio Kani said.
