Woodside sells partial share in Scarborough to JERA

(Sharecast News) - Woodside announced a transaction with JERA on Friday involving equity participation in the Scarborough joint venture, LNG trade arrangements, and cooperation in advancing new energy and low-carbon solutions. The company said it had finalised a binding sale and purchase agreement with JERA involving the sale of a 15.1% non-operating participating interest in Scarborough.

It said the transaction, valued at an estimated $1.4bn, included a purchase price of $740m along with reimbursement to Woodside for JERA's portion of expenditures incurred from 1 January 2022.

Completion was anticipated in the second half of 2024.

Additionally, Woodside and JERA had inked a non-binding heads of agreement for the sale and purchase of six LNG cargoes annually on a delivered ex-ship basis for a decade, starting from 2026.

The collaboration also included a non-binding agreement for joint exploration of new energy ventures, including potential collaborations in areas such as ammonia, hydrogen, carbon management technology, and carbon capture and storage.

"Woodside welcomes Japan's largest utility, JERA, into the Scarborough joint venture," said chief executive officer Meg O'Neill.

"This builds on a long history of collaboration, starting in 1989 with LNG sales from the North West Shelf to JERA's parent companies Tokyo Electric and Chubu Electric.

"JERA's participation in Scarborough, which will also include LNG Japan, is a further demonstration of the importance of the project to Japanese customers and confidence in long-term demand."

O'Neill described Scarborough as a "world-class project," which would provide reliable energy for our customers in the Asian region, including in Japan.

"LNG continues to be an important energy source for Japan and one which supports the country's decarbonisation ambitions.

"In Australia, the Scarborough Energy Project will provide local jobs and contracting opportunities and deliver tax revenue to state and federal governments."

Meg O'Neill said Woodside was also looking to explore new energy and business opportunities alongside JERA.

"These have the potential to further our shared ambitions to develop new energy value chains between Australia and Japan."

At 0802 GMT, shares in Woodside Energy Group were down 1.2% at 1,560p.

Reporting by Josh White for Sharecast.com.