Japan’s Jera said it has signed a deal with Australia’s Santos to buy a stake in the Barossa/Caldita gas field which will provide gas for the Darwin LNG plant in the Northern Territory.
Santos took a final investment decision earlier this year for its $3.6 billion Barossa project to secure feed gas for the Darwin LNG plant.
The Santos-operated Darwin LNG plant has the capacity to produce about 3.7 million tonnes of LNG per annum.
Jera and Santos have last year signed a letter of intent for the purchase of a stake in the Barossa field and the two firms were working on the binding agreement.
Under the new deal, JERA Australia, a unit of the joint venture of Tepco and Chubu Electric, would buy a 12.5 percent stake in the Barossa gas field from a subsidiary of Santos, according to a Jera statement on Wednesday.
Jera said it expects the acquisition to close after the necessary approval and authorization procedures.
As a result of this acquisition, Jera would participate in the project to develop a successor gas field for the Darwin LNG project in Australia, it said.
Also, Jera said it would receive about 0.425 mtpa of LNG from the project which is equivalent to its equity stake in the Barossa gas field.
“Because the Barossa gas field is medium-sized, and existing facilities such as the Darwin LNG project’s liquefaction plant, an LNG storage tank, and jetty can be utilized, the project enables JERA to secure highly competitive LNG with extremely low development risk,” it said.
Jera did not reveal the price tag of the deal. Santos said in a separate statement that Jera would pay about $300 million for its share of capital expenditure on the project.
Jera said it would work together with its partners to develop the project and ensure a stable supply of LNG to the global market, including to Japan and to gas-to-power projects in Asia.
In addition, Jera would also work with its partners to study the development of zero-emission projects and to evaluate CCS projects, it said.
Jera already has a 6.1 stake in Darwin LNG. The project has produced LNG at the Darwin plant using natural gas supplied from the Bayu-Undan gas field, located in waters off Timor-Leste, and contributed to the stable supply of LNG for about 15 years since production began in 2006.
However, Jera said production at the Bayu-Undan gas field would probably end within a few years and the development of the Barossa gas field would continue to supply feed gas to the Darwin LNG liquefaction plant.