Woodside Energy has entered into a strategic relationship with LNG Japan Corporation which involves shared equity in the Scarborough Joint Venture, potential LNG offtake and collaborations on opportunities in new energy.
The sale and purchase agreement between Woodside and LJ Scarborough Pty Ltd includes the sale of a 10 per cent non-operating participating interest in the Scarborough Joint Venture.
LJ Scarborough Pty Ltd is fully owned by LNG Japan and serves as a joint venture between Sumitomo Corporation and Sojitz Corporation.
The purchase price is currently US$500 million and is still subject to changes.
LNG Japan has agreed to reimburse Woodside for the company’s share of expenditure for the Scarborough Joint Venture since 1 January 2022.
Expected to be completed before March 2024, the total expected repayment — which includes the purchase price, reimbursed expenditure and escalation — amounts to approximately US$880 million.
The completion of the Scarborough project depends on the approvals from the Foreign Investment Review Board, the National Offshore Petroleum Titles Administrator and the WA Government.
Woodside will hold the remaining 90 per cent in the joint venture and remain as the operator.
Starting from 2026, approximately 0.9 million tonnes of LNG from the Scarborough Joint Venture is expected to be exported for the next decade.
Sojitz, Sumitomo and Woodside have also agreed to collaborate together to explore new energy opportunities involving ammonia, carbon capture and storage (CCS), carbon management technology and hydrogen.
Woodside CEO Meg O’Niell said the support of LNG Japan will serve as a testament to the quality of the Scarborough project as it highlights the ongoing demand from Japanese buyers for new supplies of gas and the role of it in upholding Japan’s energy security.
“Our new energy agreements with Sumitomo and Sojitz provide further opportunities for us to work closely together on our shared decarbonisation and energy security ambitions.
“Scarborough will be an important source of gas for both the Western Australian and international markets, supporting domestic jobs and providing taxation revenue for the State and Federal Governments,” said O’Niell.
WA Premier congratulated both Woodside and Japan LNG and stated the collaboration will not only ensure increased LNG exports from the State but also establish further cooperation on new energy opportunities.
“This strategic partnership will further support Western Australia’s energy transition, by increasing investment in technologies such as carbon capture and storage, and is part of economic diversification.
“This announcement reinforces the increasing international interest in Western Australia’s valuable resources and their confidence to invest in WA which in turn supports jobs and the strengthens our economy,” said Cook.
