JERA to pay $1.4bn to Australia's Woodside for Scarborough stake

(Reuters) -- Woodside Energy is selling a 15.1% stake in its Scarborough project to Japan's JERA for about $1.4 billion, marking the Australian gas producer's second stake sale to a Japanese liquefied natural gas (LNG) buyer in six months.

The estimated value of the nonoperating participating interest sale deal comprises a purchase price of about $740 million and reimbursement to Woodside for JERA's share of expenditure incurred from the transaction effective date of Jan. 1, 2022, Woodside said on Friday.

The deal is JERA's largest overseas LNG stake acquisition, Yuichiro Kato, executive officer of JERA, told a news conference on Friday. JERA, Japan's biggest power generator, is looking at funding the purchase through a combination of equity capital and debt, he added.

In August 2023, Woodside announced a sale of 10% participating interest in Scarborough to LNG Japan for $500 million.

Resource-scarce Japan is the world's second-biggest LNG importer after China. Despite gradually cutting imports of the fuel over the past decade, thanks to nuclear power restarts and renewable energy, it still relies on LNG for a third of its electricity mix.

Japanese companies have been diversifying their sources of LNG through acquisitions abroad. In December, Tokyo Gas Japan's biggest city gas supplier, bought Texas-based natural gas producer Rockcliff Energy for $2.7 billion.

The stake sale to JERA was expected to be completed in the second half of 2024, Woodside said in a statement.

If both the stake sales go through, Woodside will end up with a 74.9% interest in the $12 billion Scarborough gas project and continue as its operator. The project continues to target its first LNG cargo for 2026.

"JERA's participation in the Scarborough joint