JERA Co. announced it entered into a sale and purchase agreement with Woodside Energy Group Ltd (Woodside), a major Australian energy company, to acquire a 15.1% participating interest in the Scarborough gas field development project.

The total consideration of the acquisition of the Project is estimated to be approximately US$ 1.4 billion, which comprises the purchase price and reimbursement to Woodside for JERA’s share of expenditure incurred up to completion. Completion of the transaction is subject to conditions, including obtaining permits and approvals.

The Scarborough gas field is located off the northwest coast of Western Australia in Commonwealth waters. Natural gas produced from the Scarborough field will be transported via a subsea pipeline to the Pluto LNG facilities for the production of LNG. The composition of the Scarborough gas is very low in CO2, at less than 0.1%.

The annual LNG production expected from the Project is approximately 8 million tonnes per annum (Mtpa) at its peak rate. JERA will off-take an equity share of approximately 1.2 Mtpa of LNG cargoes. The final investment decision for the Project was made in November 2021, and the first cargo is targeted for 2026.

As part of the broader strategic relationship, JERA also entered into a non-binding heads of agreement (HOA) with Woodside, for the sale and purchase of LNG from its portfolio. Under the agreement, JERA intends to purchase 6 cargoes (approximately 0.4 Mtpa) of LNG from Woodside for 10 years from 2026 onwards.

In addition, JERA signed a non-binding memorandum of understanding (MOU) with Woodside to explore collaboration in decarbonization initiatives. Moving forward, JERA will be evaluating potential collaboration with Woodside in areas such as ammonia, hydrogen, and Carbon Capture and Storage (CCS).

Yukio Kani, JERA Global CEO and Chair said, “Solving the world's energy issues requires deep collaboration to tackle challenges one by one with reliable partners. I am grateful for the open and engaging dialogue I have had with Woodside CEO Meg O’Neill. I look forward to further developing our relationship with Woodside, a global player in LNG, and to promoting new initiatives to achieve decarbonization.”

Woodside CEO Meg O’Neill welcomed Japan’s largest utility, JERA, into the Scarborough Joint Venture.

“JERA’s participation is a further demonstration of the importance of Scarborough to Japanese customers and confidence in long-term demand.

“Scarborough is a world-class project which will provide reliable energy for customers in the Asian region, including in Japan. LNG continues to be an important energy source for Japan and one which supports the country’s decarbonisation ambitions,” she said.