Woodside has announced a sale and purchase agreement with LJ Scarborough Pty Ltd (LNG Japan) for the sale of a 10% non-operating participating stake in the Scarborough Joint Venture.
Additionally, Woodside has formed a strategic partnership with LNG Japan that has three components: equity in the Scarborough Joint Venture, prospective LNG offtake, and collaboration on future energy prospects.
The acquisition price, subject to changes, is US$500 million. LNG Japan will compensate Woodside for its portion of the Scarborough project’s costs beginning on 1 January 2022, the Transaction’s effective date. The entire payment, including the purchase price, reimbursed expenditure, and escalation, is projected to be about US$880 million upon the conclusion of the Transaction, which is expected in the first quarter of 2024.
The Transaction is subject to conditions precedent, including Foreign Investment Review Board clearance, approvals from the National Offshore Petroleum Titles Administrator, and approvals from the Western Australian Government.
Woodside and LNG Japan Corporation have engaged in non-binding heads of agreement to sell and purchase 12 LNG cargoes per year (about 0.9 million tonnes per annum) for ten years beginning in 2026.
“The support of LNG Japan is testament to the quality of the Scarborough project. It also underscores the ongoing demand from Japanese buyers for new supplies of gas and the role of gas in supporting Japan’s energy security,” Woodside CEO Meg O’Neill said.
According to O’Neill, Scarborough will be a crucial gas supply for both local and international markets, sustaining domestic jobs and providing taxation revenue to the state and federal governments.
“We are very pleased to join the Scarborough Joint Venture and are looking forward to finalising the LNG offtake agreement and exploring business opportunities in the new energy sector,” LNG Japan CEO Kyo Onojima said.
Following completion, Woodside will own 90% of the Scarborough Joint Venture and continue operating it. Scarborough gas will be processed at Woodside’s Pluto LNG facility, where Pluto Train 2 is now under construction. Woodside also operates the Pluto Train 2 Joint Venture, in which it has a 51% stake.
Woodside has also signed non-binding agreements with Sumitomo Corporation and Sojitz Corporation to work on global prospects in new energy, including ammonia, hydrogen, carbon capture and storage (CCS), and carbon management technology.
“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,” O’Neill said.
