November 05, 2024 [Jera]- JERA Co., Inc. (JERA), a global energy company and Japan’s largest producer and supplier of electricity, today announced completion of a Sale and Purchase Agreement with Woodside Energy (Australia) Pty Ltd a subsidiary of Woodside Energy Group Ltd (Woodside) to acquire a 15.1 per cent participating interest in the Scarborough gas field development project, located 375km off the coast of Karratha, Western Australia.
The acquisition, announced in February 2024 and estimated at around US$1.4 billion, comprises purchase price and reimbursement to Woodside of JERA’s share of expenditure incurred up to completion, and was subject to standard Australian investment conditions and approvals.
The Scarborough Joint Venture includes the Scarborough gas field and associated offshore and subsea infrastructure. Scarborough natural gas will be transported by Woodside, as operator, via approximately 430km of subsea pipeline to the Woodside operated Pluto production facilities. JERA will take an equity share of approximately 1.2 million tonnes per annum (Mtpa) of liquefied natural gas (LNG) cargoes, from a total expected production of approximately 8 Mtpa at peak rate.
Finalisation of the Scarborough gas field deal follows a separate announcement in September 2024 of a signed sale and purchase agreement (SPA) between JERA and Woodside for the long-term supply of LNG to Japan.
Under that SPA, Woodside will supply approximately 0.4 million tonnes of LNG (six cargoes) each year, over 10 years on a delivered basis, starting in April 2026. LNG delivered to JERA under the SPA will be sourced from volumes across Woodside’s global portfolio.
Financing arrangements for the acquisition, including a loan guarantee, have been made with the Japan Organisation for Metals and Energy Security (JOGMEC).
Moving forward, JERA’s Senior Managing Executive Officer and Chief Low Carbon Fuel Officer, Mr Ryosuke Tsugaru said that under a non-binding memorandum of understanding, JERA would evaluate further potential collaboration with Woodside in the areas of lower carbon fuels and in Carbon Capture and Storage (CCS).
“JERA and Woodside share a determination to responsibly navigate the energy transition, with LNG set to be an essential ‘firming fuel’ across the world for many years to come – particularly in developing regions,” Mr Tsugaru said.
“As population grows, so does the demand for energy and the first step in the energy transition for many countries is to make the move away from coal-fuelled power to LNG.
“JERA is directly involved in decarbonisation efforts in the Asian region, including projects in various stages of development to switch power plants from coal to LNG.”
JERA’s interest in Scarborough will be held by JERA Scarborough Pty Ltd via JERA’s 100 per cent subsidiary JERA Australia Pty Ltd, located in Perth.
JERA Australia CEO and Managing Director Gaku Takagi said the Australian team was looking forward to working with Woodside and to adding the development of Scarborough to its list of quality Australian projects.
JERA Co., Inc. established JERA Australia in 2017 to oversee its key investments in Australian LNG projects including interests in the Gorgon, Ichthys, Darwin LNG and Barossa projects.
“Australia remains strategically important to JERA and to Japan’s energy security,” Mr Takagi said. “Of around 35 million tonnes of LNG handled by JERA every year, more than 10 Mtpa is sourced from Australia.”
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