Australian LNG player Woodside has entered into a deal to sell a 10 percent stake in its Scarborough project to a joint venture consisting of Japan’s Sojitz and Sumitomo.
In November 2021, Woodside took a final investment decision on the Scarborough and Pluto LNG Train 2 developments worth $12 billion.
Woodside’s Pluto LNG terminal currently has one train with a capacity of 4.9 mtpa and Woodside and US engineer Bechtel started building the second Pluto train last year.
Pluto Train 2 will get gas from the Scarborough gas field, located about 375 km off the coast of Western Australia, through a new trunkline long about 430 km.
Woodside is also operator of the Pluto Train 2 JV and holds a 51 percent participating interest, while US-based Global Infrastructure Partners hold the rest.
Woodside said on Monday it has established a strategic relationship with LNG Japan, a 50:50 JV between Sumitomo and Sojitz, which involves the sale of 10 percent equity in the Scarborough JV, potential LNG offtake, and collaboration on opportunities in new energy.
LJ Scarborough, a unit of LNG Japan, will buy the 10 percent stake and the purchase price is $550 million.
LNG Japan will reimburse Woodside for its share of expenditure for the Scarborough project from the transaction effective date of January 1, 2022.
On completion of the Transaction, expected in the first quarter of 2024, the estimated total consideration comprising the purchase price, reimbursed expenditure and escalation is about $880 million, according to Woodside.
Woodside said that completion of the transaction remains subject to conditions precedent including government approvals.
12 LNG cargoes per year
As part of the broader strategic relationship, Woodside and LNG Japan have entered into a non-binding heads of agreement for the sale and purchase of 12 LNG cargoes per year, or about 0.9 million tonnes per year.
The deal is for a period of 10 years starting in 2026.
Woodside has also entered into non-binding agreements to collaborate with Sumitomo and Sojitz 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 percent interest in the Scarborough JV and remain
as operator.
“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’Neil said in the statement.
