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Woodside Expands Strategic Ties with JERA in Multi-Faceted Deal

by Krystal

Woodside has strengthened its strategic alliance with JERA through a comprehensive transaction encompassing equity in the Scarborough joint venture (JV), LNG offtake, and collaboration in new energy and lower carbon services.

Under a binding sale and purchase agreement, Woodside will sell a 15.1% non-operating participating interest in the Scarborough JV to JERA for an estimated total consideration of US$1400 million. This includes a purchase price of approximately US$740 million and reimbursement to Woodside for JERA’s share of incurred expenditures from the effective transaction date of January 1, 2022. The deal is set to conclude in the second half of 2024.

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In addition to the Scarborough JV transaction, Woodside and JERA have entered into a non-binding heads of agreement for the sale and purchase of six LNG cargoes per year for ten years, starting in 2026, from Woodside’s global portfolio.

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The collaboration extends to new energy initiatives, with a non-binding agreement covering potential ventures in ammonia, hydrogen, carbon management technology, and carbon capture and storage, aligning with shared decarbonization goals.

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Meg O’Neill, CEO of Woodside, emphasized the historical collaboration with JERA and welcomed them into the Scarborough JV, highlighting the project’s significance for Japanese customers and their confidence in long-term demand. The Scarborough Energy Project is anticipated to provide reliable energy for the Asian region, supporting Japan’s decarbonization ambitions.

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Yukio Kani, JERA Global CEO and Chair, expressed gratitude for the collaboration and the commitment to addressing global energy challenges. The deal includes an option for JERA to acquire a 15.1% non-operating participating interest in the Thebe and Jupiter fields, and a non-binding agreement for long-term collaboration in pursuing additional feed gas and joint investment in offshore gas fields for future integration with the Pluto LNG facility via Scarborough infrastructure. Woodside will also provide carbon management services to assist JERA in meeting its carbon emissions obligations from the Scarborough JV.

Completion of the Scarborough equity transaction is contingent on various approvals, including those from the Foreign Investment Review Board, National Offshore Petroleum Titles Administrator, Western Australia Government, and requisite financing approvals. Following the equity sale, Woodside will retain a 74.9% interest in the Scarborough JV and continue as the operator.

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