Woodside Secures Preliminary LNG Deal to Supply JERA in Winter Seasons

JERA Co. Inc. and Woodside Energy Group Ltd. have signed a heads of agreement for the Australian company to export liquefied natural gas (LNG) to the Japanese power utility in the winter months for at least five years.

Under the deal, Woodside will deliver LNG to Japan on an ex-ship basis between the months of December and February from 2027. Three cargoes totaling about 200,000 metric will be delivered per year.

The agreement was signed “under a company-to-company discussion framework for enhanced cooperation on energy security established by the Government of Japan and the Japan Bank of International Cooperation (JBIC)”, Woodside said in a press release.

JERA said separately, “Gas-fired power generation plays a critical role in meeting peak energy demand and balancing seasonal fluctuations, challenges that are intensifying with the growing adoption of renewable energy. As LNG remains a key fuel for thermal power generation, securing a reliable and flexible supply is becoming increasingly important – especially during the winter peaks”.

“This agreement aims to secure stable LNG supply during Japan’s winter peak demand period”, JERA added.

The LNG will come from Woodside’s LNG portfolio including the Scarborough Enbergy Project, JERA said.

Last year Woodside sold a 25.1 percent stake in the Scarborough field offshore Western Australia to Japanese companies: 15.1 percent to JERA and 10 percent to LNG Japan.

Scarborough gas will be processed at Pluto LNG, where Woodside is building a second train. Pluto train 2 is designed to process around five million metric tons a year of LNG. It is expected to start LNG production 2026. It will also include domestic gas infrastructure able to supply up to 225 terajoules a day to Western Australia, according to Woodside.

In May 2024 JBIC agreed to lend Woodside $1 billion for the Scarborough gas project. “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 then.

Last week Woodside signed a heads of agreement with Petroliam Nasional Bhd. for the sale of one million metric tons per annum (MMtpa) of LNG from Woodside’s global portfolio, including the under-construction Louisiana LNG, for 15 years. Delivery is set to start 2028.

Louisiana LNG reached an FID (final investment decision) last April. Louisiana LNG holds a permit from the United States Energy Department to export a cumulative 1.42 trillion cubic feet a year of natural gas equivalent, or 27.6 MMtpa of LNG according to Woodside, to both FTA and non-FTA countries.

The FID was for phase 1, which involves three liquefaction trains with a combined capacity of 16.5 MMtpa.

The Woodside-Petronas agreement “is expected to support PETRONAS’ efforts to ensure secure, flexible LNG supply to meet growing demand in Peninsular Malaysia and the broader Asia-Pacific region”, Petronas said in a statement June 18.

Woodside executive vice president and chief commercial officer Mark Abbotsford said, “This agreement marks the beginning of a new era of collaboration between Woodside and PETRONAS, and is an important step towards what would be our first long-term LNG sales to Malaysia”.

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