Japan’s largest utility JERA has entered into an agreement with Australia’s Woodside to acquire a participation interest in the Scarborough gas field.
JERA bought a 15.1% participating interest in the Scarborough gas field development project for a total consideration of approximately $1.4bn. This amount comprises the purchase price and reimbursement to Woodside for JERA’s share of expenditure incurred up to completion.
The Scarborough gas field is located off the northwest coast of Western Australia in Commonwealth waters. Gas produced from the Scarborough field will be transported via a subsea pipeline to the Pluto LNG facilities. 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 mtpa at a peak rate. JERA will offtake an equity share of around 1.2 mtpa of LNG. The final investment decision for the project was made in November 2021 with first cargo expected in 2026.
JERA also entered into a non-binding heads of agreement with Woodside, for the sale and purchase of LNG from its portfolio. Under the agreement, JERA intends to purchase six cargoes or approximately 0.4 mtpa of LNG from Woodside for ten years starting from 2026 onwards.
The Japanese firm also signed a non-binding memorandum of understanding with the energy major 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.
