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JERA in US$1.4 billion deal for Australian gas stake
Annual production at Scarborough field estimated at 8 million tonnes per annum
Michael Marray 28 Feb 2024

Japan’s largest power producer JERA has agreed to acquire from Australian company Woodside Energy Group a 15.1% interest in the Scarborough gas field development project.

The transaction is valued at US$1.4 billion, comprising 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. Natural gas produced from Scarborough will be transported via a subsea pipeline to the Pluto LNG facilities.

Annual LNG production expected from the project is approximately 8 million tonnes per annum (mtpa) at its peak rate. JERA will off-take an equity share of approximately 1.2 mtpa of LNG cargoes. The final investment decision for the project was made in November 2021, and the first cargo is targeted for 2026.

As part of a broader strategic relationship, 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 (approximately 0.4 mtpa) of LNG from Woodside for 10 years from 2026. In addition, JERA signed a non-binding memorandum of understanding with Woodside to explore collaboration in decarbonization initiatives.

The Japanese firm is also evaluating potential collaboration with Woodside in areas such as ammonia, hydrogen, and carbon capture and storage.

“JERA’s participation is a further demonstration of the importance of Scarborough to Japanese customers, and confidence in long-term demand," says Woodside chief executive officer Meg O’Neill. LNG continues to be an important energy source for Japan and one which supports the country’s decarbonization ambitions.

The Scarborough gas field is located in the Carnarvon Basin, approximately 375 kilometres off the Pilbara coast of Western Australia. It will be developed through new offshore facilities connected by a 430km pipeline to a second LNG train (Pluto Train 2) at the existing Pluto LNG onshore facility.

The project will include the installation of a floating production unit (FPU) with eight wells drilled in the initial phase, and 13 wells drilled over the life of the gas field. All wells will be tied back to a semi-submersible FPU moored in 950 metres of water close to the gas field. Approximately 5 mtpa of Scarborough gas will be processed through Pluto Train 2, with up to 3 mtpa processed through the existing Pluto Train 1.

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