Woodside establishes strategic relationship with LNG Japan

The purchase price is US$500 million, subject to adjustments. LNG Japan will reimburse Woodside for its share of expenditure for the Scarborough project from the transaction effective date of 1 January 2022.

On completion of the transaction, expected in 1Q24, the estimated total consideration comprising the purchase price, reimbursed expenditure and escalation is approximately US$880 million.

Completion of the transaction is subject to conditions precedent including Foreign Investment Review Board approval, National Offshore Petroleum Titles Administrator approvals and Western Australian Government approvals.

As part of the broader strategic relationship, Woodside and LNG Japan Corp. have entered into a non-binding heads of agreement for the sale and purchase of 12 LNG cargoes per year (approximately 0.9 million tpy) for 10 years commencing in 2026. Woodside has also entered into non-binding agreements to collaborate with Sumitomo Corp. and Sojitz Corp. on global opportunities in new energy, which could include ammonia, hydrogen, carbon capture and storage (CCS) and carbon management technology.

Following completion, Woodside will hold a 90% interest in the Scarborough Joint Venture and remain as operator. Scarborough gas will be processed at the Pluto LNG facility, where Woodside is currently constructing Pluto Train 2. Woodside is also operator of the Pluto Train 2 Joint Venture and holds a 51% participating interest.

LJ Scarborough Pty Ltd is currently a wholly owned subsidiary of LNG Japan Corp., which is a 50:50 joint venture between Sumitomo Corp. and Sojitz Corp.

Woodside CEO Meg O’Neill said: “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.

“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.

“We look forward to working with LNG Japan to deliver this world-class project.”

Read the article online at: https://www.hydrocarbonengineering.com/tanks-terminals/08082023/woodside-establishes-strategic-relationship-with-lng-japan/