Woodside Secures $1B Loan from JBIC for Scarborough LNG

Woodside Energy Group Ltd has today signed a $1 billion loan agreement with the Japan Bank for International Cooperation (JBIC) to fund its Scarborough Energy Project.

The agreement follows a memorandum of understanding signed by Woodside and JBIC in November 2022 aimed at securing a stable supply of energy for Japan and assisting in achieving its decarbonisation goals, Woodside said in a news release.

The loan “further strengthens Woodside’s balance sheet, providing diversity of funding and liquidity,” the company added.

Woodside CEO Meg O’Neill said the loan reflected the ongoing confidence from Japanese investors in Woodside’s Australian liquefied natural gas (LNG) projects. “JBIC has supported all of Woodside’s milestone Australian projects including the North West Shelf, Pluto LNG and now Scarborough. It is therefore fitting that we have executed this agreement in the same week that Woodside celebrates 35 years of secure and reliable LNG exports to Japan,” she noted.

“Investment in new Australian LNG supply, like Scarborough, can help Japanese customers meet their energy security needs while also supporting regional decarbonisation goals,” O’Neill said.

“This loan will contribute toward securing long-term, stable supplies of LNG, which is an important energy resource for Japan,” JBIC Deputy Governor Kazuhiko Amakawa said.

According to the release, the Scarborough Energy Project is on schedule for its first LNG cargo in 2026. Work at the Pluto LNG facility is proceeding with the ongoing arrival and installation of the Pluto Train 2 modules on site in Karratha, Western Australia. The installation of the subsea infrastructure and the drilling program continues while the floating production unit’s living quarters have been installed on the topsides, Woodside said.

In February, Woodside announced it was selling a non-operating participating interest in the Scarborough joint venture (JV) to JERA Scarborough Pty Ltd, a wholly owned subsidiary of Japan’s JERA Co., Inc., for an estimated total consideration of $1.4 billion.

The total consideration is composed of the purchase price of approximately $740 million plus a reimbursement to Woodside for JERA’s share of expenditure incurred from the transaction effective January 1, 2022. Completion of the transaction is expected in the second half.

The completion of the transaction is subject to customary conditions, including Foreign Investment Review Board approval, National Offshore Petroleum Titles Administrator approvals, Western Australian Government approvals and satisfaction of the requisite financing approvals, Woodside said in an earlier statement.

The Scarborough Energy Project comprises the Scarborough Joint Venture, the Pluto Train 2 Joint Venture and modifications to Pluto Train 1 to process Scarborough gas. The Scarborough Joint Venture includes the Scarborough field and associated offshore and subsea infrastructure.

The Scarborough field is located approximately 233 miles (375 kilometers) off the coast of Western Australia and the reservoir contains less than 0.1 percent carbon dioxide.

The transaction includes an option for JERA to acquire a 15.1 percent non-operating participating interest in the Thebe and Jupiter fields, as well as a non-binding agreement that outlines a long-term collaboration to pursue opportunities for additional feed gas and joint investment in offshore gas fields for future tieback to the Pluto LNG facility via Scarborough infrastructure.

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