Investing.com-- Australian energy giant Woodside Energy Ltd (ASX:WDS) said on Friday that it will sell a stake in its Scarborough project to JERA for $1.4 billion, and also announced more collaborations with the Japanese utility gaint.
Woodside will sell a 15.1% non-operating participating interest in Scarborough to JERA, with the deal expected to close in the second half of 2024, Woodside said in an announcement on the Australian Stock Exchange.
After the sale, Woodside will retain a 74.9% interest in Scarborough and remain as its sole operator.
Additionally, Woodside and JERA entered a non-binding agreement under which JERA will buy six liquefied natural gas (LNG) cargoes, delivered on an ex-ship basis every year for 10 years, starting from 2026.
The two also entered a non-binding agreement for “new energy collaboration” for potential in ammonia, hydrogen, carbon management technology, carbon capture and storage.
The deal also includes an option for JERA to but a 15.1% non-operating participating interest in Woodside's Thebe and Jupiter fields, as well as a non-binding agreement for more collaborations for joint investments in offshore gas fields.
JERA is a repeat customer of Woodside, with its parent companies having constantly purchased LNG from the energy firm since 1989. The firm is one of Japan’s biggest power generators, and was formed as a 50-50 joint venture between a unit of Tokyo Electric Power Co., Inc. (TYO:9501) and Chubu Electric Power Co., Inc. (TYO:9502).
Friday’s deal comes after Woodside sold a 10% interest in Scarborough to LNG Japan in August 2023, for $500 million.
Woodside is still developing Scarborough, with the gas field set to feed Woodside's Pluto LNG plant. The project, along with Pluto, are Woodside's biggest growth project.