The deal with JERA,Japan’s largest importer of liquefied natural gas (LNG) cargoes,comes just six months after Woodside struck a similar agreement to sell a 10 per cent interest in the $16.5 billion Scarborough project in Western Australia to a joint venture between Japan’s Sojitz Corporation and Sumitomo.
Liquefied natural gas (LNG) has become one of Australia’s biggest exports.AP
Woodside and JERA on Friday said they had also entered into a non-binding,10-year deal for the sale and purchase of six LNG cargoes,which would be used to supply energy to Japanese customers from 2026.
“JERA’s participation in the Scarborough joint venture … is a further demonstration of the importance of the project to Japanese customers and confidence in long-term demand,” Woodside chief executive Meg O’Neill said.
Once the sale to JERA is completed,Woodside would end up with a 74.9 per cent interest in the Scarborough project and continue as its operator,the company said.
LNG – natural gas that has been super-chilled to minus 160 degrees,turned into a liquid and transported on specialised ships – has become one of Australia’s top exports over the past decade and a major money-maker,especially since Russia’s invasion of Ukraine in 2022 choked global supplies of the fuel and sent commodity prices soaring.
However,the LNG industry’s expansion has also attracted significant environmental concerns because it is a major source of greenhouse gas emissions,including methane,which scientists warn must be urgently reduced to combat the worst impacts of global warming.
Woodside’s Scarborough project off the coast of WA,expected to begin production in 2026,has been a particular focus for climate campaigners in Australia who are fighting to halt the expansion of new fossil fuel projects,and has been embroiled in legal challenges.
While Woodside points out Scarborough is low in carbon dioxide compared with conventional oil and gas reservoirs,the company acknowledges that it will generate 878 million tonnes of emissions – equivalent to nearly two years of Australia’s total emissions – over the life of the project once the end-use emissions caused by customers of Scarborough’s gas are factored in.
Despite the accelerating decarbonisation pledges and the adoption of greener technologies,oil and gas companies globally,including Woodside,predict that demand for their products will continue to be resilient for years to come.
Gas consumption may have peaked in some regions,but energy demand from countries in Asia will rise to support economic growth,they say,while utilities will increasingly need to turn to the fuel to support the expansion of renewable energy,calling on it to supply reliable power at times when the wind isn’t blowing and the sun isn’t shining.
JERA chief executive Yukio Kani said solving the world’s energy issues required reliable partners and “deep collaboration to tackle challenges one by one”.
“I look forward to further developing our relationship with Woodside,a global player in LNG,and to promote new initiatives to achieve decarbonisation,” he said.
Japan remains the top destination for Australian LNG,importing 29 million tonnes of LNG,worth about $16 billion,during 2022-23.
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