Woodside strikes $2.1b deal with JERA, Japan’s biggest LNG buyer

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Woodside, the largest Australian gas company, has struck a deal to sell a 15 per cent stake in its Scarborough gas field project to a Japanese utility giant for an estimated $US1.4 billion ($2.1 billion).

The deal with JERA, Japan’s largest importer of liquefied natural gas (LNG) cargoes, comes just six months after Woodside struck a similar agreement to sell a 10 per cent interest in the $16.5 billion Scarborough project in Western Australia to a joint venture between Japan’s Sojitz Corporation and Sumitomo.

Liquefied natural gas (LNG) has become one of Australia’s biggest exports. Credit: AP

Woodside and JERA on Friday said they had also entered into a non-binding, 10-year deal for the sale and purchase of six LNG cargoes, which would be used to supply energy to Japanese customers from 2026.

“JERA’s participation in the Scarborough joint venture … is a further demonstration of the importance of the project to Japanese customers and confidence in long-term demand,” Woodside chief executive Meg O’Neill said.

Once the sale to JERA is completed, Woodside would end up with a 74.9 per cent interest in the Scarborough project and continue as its operator, the company said.

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LNG – natural gas that has been super-chilled to minus 160 degrees, turned into a liquid and transported on specialised ships – has become one of Australia’s top exports over the past decade and a major money-maker, especially since Russia’s invasion of Ukraine in 2022 choked global supplies of the fuel and sent commodity prices soaring.

However, the LNG industry’s expansion has also attracted significant environmental concerns because it is a major source of greenhouse gas emissions, including methane, which scientists warn must be urgently reduced to combat the worst impacts of global warming.

Woodside’s Scarborough project off the coast of WA, expected to begin production in 2026, has been a particular focus for climate campaigners in Australia who are fighting to halt the expansion of new fossil fuel projects, and has been embroiled in legal challenges.

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