Woodside Energy Group Ltd and JERA, the two energy giants have announced the signing of a significant long-term liquefied natural gas (LNG) supply agreement, the securing of the deal landmarks in strengthening the tactical relationship between the two companies. Under the sale and purchase agreement (SPA), Woodside will supply approximately 0.4 million tonnes of LNG annually to JERA, equivalent to six cargoes per year. The contract is set to commence in April 2026 and will run for 10 years.
The LNG will be sourced from Woodside’s global portfolio and delivered on a delivered ex-ship (DES) basis, ensuring flexibility in supply sources. This agreement follows a February 2024 announcement in which Woodside agreed to sell a 15.1 percent non-operating participating interest in the Scarborough Joint Venture to JERA. The equity sale, valued at approximately US$1.4 billion, is expected to be completed before the end of 2024.
Mark Abbotsford, Woodside’s Executive Vice President and Chief Commercial Officer, commented, “This LNG offtake agreement is Woodside’s first long-term sale to JERA from our global portfolio and delivers on one of the core elements of our strategic relationship outlined earlier this year. We understand the demand from our customers in the Asian region for reliable energy. LNG continues to be an important energy source for Japan, one which can support the country’s efforts to decarbonize”.
The agreement underscores the continued importance of LNG in Japan’s energy mix, particularly as the country seeks to balance energy security with decarbonization efforts. It also reflects the growing strategic importance of Australian LNG suppliers in meeting Asia’s energy demands.
Beyond the LNG supply agreement, Woodside and JERA have spoken about the interest in exploring partnerships on decarburization initiatives. This includes potential projects in areas such as ammonia, hydrogen, and carbon capture and storage (CCS). In evolving global energy demands, this collaboration ensures a stable, long-term energy supply while addressing the challenges of the energy transition.