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Woodside sells 10% in Scarborough

Image shows Woodside logo on building

Photo by Bloomberg

8th August 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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KALGOORLIE (miningweekly.com) – Oil and gas major Woodside has struck a near $880-million deal with a subsidiary of LNG Japan Corporation to sell a 10% stake in the Scarborough project.

LNG Japan will pay Woodside a purchase price of $500-million, and will 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.

Following completion, Woodside will hold a 90% interest in the Scarborough joint venture (JV) and will remain as operator. Scarborough gas will be processed at the Pluto liquefied natural gas (LNG) facility, where Woodside is currently constructing Pluto Train 2. Woodside is also operator of the Pluto Train 2 JV and holds a 51% participating interest.

Completion of the transaction is subject to conditions precedent including Foreign Investment Review Board approval, National Offshore Petroleum Titles Administrator approvals and Western Australian government approvals.

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.

“The support of LNG Japan is testament to the quality of the Scarborough project. It also underscores the ongoing demand from Japanese buyers for new supplies of gas and the role of gas in supporting Japan’s energy security,” said Woodside CEO Meg O’Neill.

“Scarborough will be an important source of gas for both the Western Australian and international markets, supporting domestic jobs and providing taxation revenue for the state and federal governments.

“We look forward to working with LNG Japan to deliver this world-class project,” she said.

The Scarborough and Pluto Train 2 developments are expected to cost a combined $12-billion, with Woodside’s share of capital expenditure amounting to $6.9-billion. First LNG cargo from Scarborough is targeted for 2026.

Edited by Creamer Media Reporter

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