Woodside closes sale of non-operating interest in Australian gas field

Australian energy giant Woodside has completed the sale of a 10% non-operating interest in the Scarborough Joint Venture, comprising the Scarborough gas field and associated offshore and subsea infrastructure, to LJ Scarborough, a subsidiary of LNG Japan, which is a joint venture between Sumitomo Corporation and Sojitz Corporation.

The completion follows Woodside’s announcement from August 8, 2023, that it had established a strategic relationship with LNG Japan that involved an equity in the Scarborough Joint Venture, potential LNG offtake, and collaboration on potential opportunities in new energy.

The sale proceeds of $910 million for equity in the Scarborough Joint Venture comprises the purchase price, reimbursed expenditure and escalation.

Furthermore, for the acquisition, the purchasing parties have received the decision of adoption as an eligible project for providing equity capital and loan guarantee from the Japan Organization for Metals and Energy Security (JOGMEC).

Woodside holds a 90% interest in the Scarborough Joint Venture and will remain the operator. Following the completion of the transaction with JERA announced this February, Woodside’s interest in the joint venture will be 74.9%.

“LNG Japan’s commitment to the Scarborough Joint Venture is a demonstration of the value our customers place on gas as a long-term source of energy as they navigate the energy transition. Completion of the sale to LNG Japan is a significant milestone as we progress toward first LNG cargo from Scarborough targeted in 2026,” said Woodside CEO Meg O’Neill.

“We are also pleased to welcome Japan Organization for Metals and Energy Security’s equity investment in LJ Scarborough Pty Ltd. JOGMEC’s support reflects the contribution Scarborough gas will make to Japan’s energy security.”

As a result of the completion of the sale, applying estimates effective as of March 26, 2024, Woodside’s Scarborough field proved (1P) undeveloped reserves reduced by 128.7 MMboe to 1,158.3 MMboe. Proved plus probable (2P) undeveloped reserves reduced by 201.1 MMboe to 1,809.7 MMboe, while Woodside’s Scarborough field Best Estimate (2C) contingent resources reduced by 2.2 MMboe to 20.2 MMboe.

Located approximately 375 kilometers off the coast of Western Australia, the Scarborough field’s development will include a floating production unit with eight wells drilled in the initial phase and thirteen wells drilled over the life of the field. The gas from the field will be processed at the Pluto LNG facility, where the company is currently constructing Pluto Train 2. 

Recently, the first three modules of a total of 51 that are required for the Pluto Train 2 arrived in Karratha. Once all modules come, they will form Pluto Train 2, which will be the second LNG production train at the existing Pluto LNG onshore facility. The first LNG cargo is slated for 2026.