Woodside Signs Massive Loan Agreement for Scarborough LNG Project

Woodside Energy Group Ltd. has signed a USD 1 billion loan agreement with the Japan Bank for International Cooperation (JBIC) to develop the Scarborough LNG project. The Scarborough project is a major development in the Carnarvon Basin and is expected to play a pivotal role in bolstering Australia's LNG market. 

The Scarborough project

The project is on track for its first LNG cargo in 2026, with the Pluto LNG facility handling Scarborough's gas. The facility's expansion includes the ongoing arrival and installation of the Pluto Train 2 modules on-site in Karratha, Western Australia.

This loan agreement is a financial transaction reflecting strong bilateral relations between Australia and Japan. In 2022, Woodside and JBIC signed a Memorandum of Understanding (MoU) to secure a stable energy supply for Japan and assist in achieving its decarbonization goals. The loan is expected to further strengthen Woodside's balance sheet, providing diverse funding and liquidity.

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Meg O'Neill, Woodside CEO, stated that the loan reflects the ongoing confidence from Japanese investors in Woodside's Australian LNG projects. She highlighted that JBIC has supported Woodside's Australian LNG projects, including the North West Shelf, Pluto LNG, and Scarborough. 

In February, Woodside announced the sale of a non-operating participating interest in the Scarborough joint venture to JERA Scarborough Pty Ltd, a wholly-owned subsidiary of Japan’s JERA Co., Inc., for an estimated total consideration of USD 1.4 billion. This deal includes the purchase price of approximately USD 740 million plus a reimbursement to Woodside for JERA’s share of expenditure incurred from the transaction, effective January 1, 2022. 

The completion of this transaction is subject to customary conditions, including approvals from the Foreign Investment Review Board, National Offshore Petroleum Titles Administrator, Western Australian Government, and satisfaction of the requisite financing approvals.

The financial backing from JBIC is crucial to developing the Scarborough project. Kazuhiko Amakawa, JBIC Deputy Governor, emphasized that the loan would contribute toward securing long-term, stable supplies of LNG, which is an important energy resource for Japan. 

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The Scarborough Project: An Overview

Woodside Energy is developing the Scarborough natural gas field, located in the Carnarvon Basin, approximately 375 km off the coast of Western Australia (WA). The development includes installing a semi-submersible floating production unit (FPU), moored in 950 meters of water and connected to a second LNG train (Pluto Train 2) at the current Pluto LNG onshore facility by a roughly 430 km pipeline. 

The first three Pluto Train 2 modules for the Scarborough Energy Project arrived on February 21, 2024. The modules were manufactured by one of the top 10 construction companies in the USA, Bechtel, in Indonesia and weighed a combined total of more than 4,000 metric tonnes. The modules are three of 51 that will be shipped to the site from the module yard to form Pluto Train 2. Woodside Energy chose Bechtel to conduct the engineering, procurement, and construction of Pluto Train 2, with construction activities starting in November 2021.

Initially, eight wells will be drilled, with 13 wells drilled over the life of the Scarborough field. The Scarborough Energy Project will produce around 8 million metric tons of LNG annually (Mtpa). Approximately 5 Mtpa of Scarborough gas will be processed through Pluto Train 2, with up to 3 Mtpa processed through the existing Pluto Train 1 following modification. 

About Woodside Energy

Woodside Energy, established in 1954, is an Australian energy company that has become a significant player in the global energy sector. With a history spanning over 65 years, Woodside has led the development of LNG projects in Australia. Additionally, Woodside's operations span oil and gas exploration, development, production, and marketing. The company has a strong presence in Australia, operating the North West Shelf Project, one of the world's largest LNG operations.

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