KALGOORLIE (mininwgeekly.com) – The Western Australian government has backed energy major Woodside’s $880-million deal with a subsidiary of LNG Japan Corporation to sell a 10% stake in the Scarborough liquefied natural gas (LNG) project.

Woodside earlier this week announced the deal under which LNG Japan would pay Woodside a purchase price of $500-million, and would also 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 approximately $880-million.

As part of the broader strategic relationship, Woodside and LNG Japan Corporation have entered into a non-binding heads of agreement for the sale and purchase of 12 LNG cargoes a year, amounting to around 0.9-million tonnes a year, for ten years commencing in 2026.

“Congratulations to Woodside and Japan LNG for entering a new strategic partnership, which will not only see increased LNG exports from Western Australia, but also establish further cooperation on new energy opportunities,” Western Australian Premier Roger Cook said.

“This strategic partnership will further support Western Australia's energy transition, by increasing investment in technologies such as carbon capture and storage (CCS), and is part of economic diversification. 

“This announcement reinforces the increasing international interest in Western Australia's valuable resources and their confidence to invest in Western Australia which, in turn, supports jobs and the strengthens our economy.”

Furthering its partnerships in Japan, Woodside recently announced non-binding agreements to collaborate with Sumitomo Corporation and Sojitz Corporation on new energy opportunities including ammonia, hydrogen, CCS and carbon management technology.

Completion of Woodside’s transaction with LNG Japan is subject to conditions precedent including Foreign Investment Review Board approval, National Offshore Petroleum Titles Administrator approvals and Western Australian government approvals.