Woodside Energy has wrapped up the sale of a 15.1% non-operational interest in its Scarborough gas project to JERA, Japan's largest power generation company, for approximately $1.4 billion. This partnership marks the latest step for Woodside as it continues to solidify its position within the energy sector, particularly focusing on liquefied natural gas (LNG) and its role in the global energy transition.
Located about 375 kilometers off the coast of Karratha, Western Australia, the Scarborough gas field is key to Woodside's operations. The field, which is noted for its low carbon dioxide content of less than 0.1%, is set to supply gas to both North Asia and the Australian domestic market. Woodside retains a 74.9% interest and will act as operator for the joint venture, ensuring its continued leadership role within the project.
The Scarborough Energy Project, which encompasses not only the Scarborough joint venture but also the Pluto Train 2 joint venture and related modifications to the existing Pluto Train 1 to accommodate Scarborough gas, was reported to be 73% complete by the end of September 2024. Woodside CEO Meg O’Neill expressed optimism about the project's progress, stating, "We remain on track for targeted first LNG cargo in 2026," highlighting the strategic importance of the Scarborough gas project for not just Woodside but for regional energy security as well.
JERA’s involvement is particularly significant, as the company is recognized for its commitment to diversifying energy sources. The chief low carbon fuel officer, Ryosuke Tsugaru, noted the company’s determination to push for greater reliance on LNG and reduce dependence on coal. This aligns well with the growing demand for energy across Asia, particularly amid efforts to transition to cleaner fuel sources. Tsugaru commented, "The first step for many countries is to make the move away from coal-fuelled power to LNG," showcasing the dual-focus on energy diversification and environmental responsibility.
Woodside’s deal with JERA included not just the sale value but also reimbursements for previous expenditures dating back to January 1, 2022. According to estimates after the sale's completion, Woodside's operational scope of the Scarborough field is supposed to reduce its proved undeveloped reserves count to 964 million barrels of oil equivalent (boe). This adjustment, along with the decrease seen in its proved plus probable undeveloped reserves, signifies the scale of resources involved and the significance of accurate resource management as the project progresses.
The Scarborough project poses considerable financial benefits for Australia, with projections indicating the potential for over A$50 billion ($33.43 billion) generated through direct and indirect taxes as the project kicks off. Plus, it is anticipated to create more than 3,000 jobs during the construction phase and sustain nearly 600 positions during its operational lifespan.
Construction activities are currently underway at the Pluto LNG facility, which processes gas from Scarborough. Recently, Saipem completed the installation of the trunkline, which spans 433 kilometers and will play a pivotal role in transporting gas from the offshore field to the onshore facility. This major infrastructure, dug up to depths of 1,400 meters, is expected to significantly bolster energy availability, facilitating the transition to cleaner energy sources necessary to meet both current and future demands.
Meg O’Neill elaborated on the importance of this partnership, stating, “This latest sale of equity underlines the long-term value Japanese customers like JERA are placing on gas.” Her sentiments reflect not just Woodside's confidence, but also the overarching narrative of Asian energy markets moving toward LNG as fundamental players within the region. “JERA is directly involved in decarbonisation efforts,” Tsugaru reaffirmed, adding credence to the idea of this collaboration pushing for sustainable solutions within the energy sector.
With global energy dynamics continually shifting, including increased demands and the need for cleaner energy sources, the Scarborough gas project is positioning itself as both a regional asset and as part of the larger solution to energy challenges. By focusing on responsible navigation of the energy transition, projects like Scarborough are at the forefront of the conversation surrounding how countries can meet their energy needs without compromising environmental integrity.
