Woodside completes sale of 10% stake in Scarborough JV to LNG Japan
Woodside, a leading Australian gas producer, on March 26 announced the completion of the sale of a 10% non-operating participating interest in the Scarborough joint venture to LJ Scarborough (LNG Japan).
The deal follows Woodside’s announcement in August 2023 that it had established a strategic relationship with LNG Japan that involved three elements: equity in the Scarborough joint venture; potential LNG offtake; and collaboration on potential opportunities in new energy.
The sale proceeds received by Woodside of $910mn for equity in the Scarborough joint venture comprises the purchase price, reimbursed expenditure and escalation. Woodside maintains a 90% interest in the Scarborough joint venture and will continue to serve as the operator.
“Completion of the sale to LNG Japan is a significant milestone as we progress toward first LNG cargo from Scarborough targeted in 2026,” Woodside CEO Meg O’Neill welcomed completion of the sale. “We are also pleased to welcome Japan Organization for Metals and Energy Security’s equity investment in LJ Scarborough. JOGMEC’s support reflects the contribution Scarborough gas will make to Japan’s energy security.”
Post the completion of the sale of a 15.1% non-operating participating interest to Jera announced in February 2024, Woodside’s interest will be 74.9% in the Scarborough joint venture.
The Scarborough project, situated approximately 375 km off the coast of Western Australia, includes the Scarborough joint venture, the Pluto Train 2 joint venture, and modifications to Pluto Train 1 to accommodate Scarborough gas. Gas from Scarborough will be processed at the Pluto LNG facility, where Woodside is currently constructing Pluto Train 2.
As a result of these transactions, there have been adjustments to Woodside's reserves and contingent resources. Proved (1P) undeveloped reserves at the Scarborough field have reduced by 128.7 mm boe to 1,158.3 mm boe, while proved plus probable (2P) undeveloped reserves decreased by 201.1 mm boe to 1,809.7 mm boe. Woodside's Scarborough field best estimate (2C) contingent resources decreased by 2.2 mm boe to 20.2 mm boe.
LJ Scarborough, the entity acquiring the stake in the Scarborough joint venture, is a jointly owned subsidiary of LNG Japan Corporation (a 50:50 joint venture between Sumitomo Corporation and Sojitz Corporation) and Japan Organization for Metals and Energy Security (JOGMEC), with JOGMEC holding a 49.9% interest in LJ Scarborough.
The final investment decision on the Scarborough project was made in November 2021, with the commencement of LNG cargo targeted for 2026.