Australian energy giant Woodside has entered into a sale and purchase agreement with LJ Scarborough, a subsidiary of LNG Japan, for the sale of a 10% non-operating interest in the Scarborough Joint Venture, which includes the Scarborough gas field and associated offshore and subsea infrastructure. The purchase price for the stake is $500 million, subject to adjustments, with reimbursement for Scarborough project expenses from January 1, 2022. The completion of the sale is expected in the first quarter of 2024, with the total consideration reaching approximately $880 million, including the purchase price, reimbursed expenses, and escalation.

Woodside will retain a 90% interest in the Scarborough Joint Venture and continue as the operator. The gas from the Scarborough field will be processed at the Pluto LNG facility, where Woodside is constructing Pluto Train 2. Additionally, Woodside and LNG Japan have entered into a non-binding heads of agreement for the sale and purchase of 12 LNG cargoes per year for ten years, beginning in 2026. The two companies will also explore opportunities in new energy, including ammonia, hydrogen, carbon capture and storage (CCS), and carbon management technology.

Located approximately 375 km off the coast of Western Australia, the Scarborough field's development includes a floating production unit with eight initial wells and thirteen over the field's life. The reservoir has minimal carbon dioxide content, and the gas will be transported for processing at Pluto LNG through a new trunkline approximately 430 km long. The project received a final investment decision in November 2021, with the first LNG cargo expected in 2026.

LNG Japan will acquire the 10% stake for $500 million and collaborate with Woodside on LNG offtake and new energy opportunities. The new partnership with LNG Japan highlights the demand for gas from Japanese buyers and supports Japan's energy security. Furthermore, Woodside CEO Meg O'Neill emphasized that the Scarborough project will be an important source of gas for domestic and international markets, creating jobs and contributing to taxation revenue for the state and federal governments. The partnership with LNG Japan aims to deliver this world-class project and work together on decarbonization and energy security goals.