Australia's Woodside Energy Group announced on Tuesday it had sold a 10% participating interest in its $12 billion Scarborough liquefied natural gas project to LNG Japan for $500 million.
Woodside will retain a 90% interest and operatorship of the project after the deal closes, which is expected in the first quarter of 2024. The sale reduces Woodside's funding requirement and technical risk for the development.
Scarborough gas will feed Woodside's Pluto LNG plant, with first cargo targeted for 2026. The combined project forms Woodside's largest growth initiative.
As part of the deal, Woodside and LNG Japan also signed a sale and purchase agreement for 12 LNG cargoes per year for 10 years starting in 2026. LNG Japan is a joint venture between Japanese companies Sumitomo and Sojitz.
Woodside CEO Meg O’Neill said LNG Japan's investment demonstrates the quality of Scarborough and the role gas will play in Japan's energy security.
Woodside also entered into new energy collaborations with Sumitomo and Sojitz to explore opportunities in ammonia, hydrogen, carbon capture and storage.
Analysts viewed the sale positively, saying the consideration exceeds their valuation and helps de-risk Woodside by reducing its funding requirement and exposure to technical risks for Scarborough's development.
