Aug. 08, 2023
Acquisition of Participating Interest in the Scarborough Gas Project in Western Australia and Collaboration towards Decarbonized Society
Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo, Director, President and Chief Executive Officer: Masayuki Hyodo) has reached agreements with Woodside Energy Group Ltd ("Woodside"), in the following two areas:
1. Acquisition of Participating Interest in the Scarborough Joint Venture in Western Australia
LJ Scarborough Pty Ltd, a currently wholly owned subsidiary of LNG Japan Corporation (“LNG Japan”, Head Office: Chiyoda-ku, Tokyo, President: Kyo Onojima), which in turn is a 50%-owned subsidiary of Sumitomo Corporation, has entered into a Sale and Purchase Agreement with a wholly owned subsidiary of Woodside, to acquire a 10% participating interest (Sumitomo Corporation’s interest: 5%) in the Scarborough Joint Venture. The transaction is subject to relevant Australian and Western Australian government approvals.
The Scarborough Joint Venture is unincorporated and comprises the Scarborough field and associated offshore and subsea infrastructure. The Scarborough field is located approximately 375km off the coast of Western Australia.
The Scarborough project will include the installation of a floating production unit with eight wells drilled in the initial phase and thirteen wells drilled over the life of the Scarborough field. The gas will be transported for processing at Pluto LNG through a new trunkline of approximately 430 km. Natural gas extracted from the Scarborough project contains relatively low levels of CO2. In addition, the Scarborough project intends to pursue further opportunities to reduce GHG emissions. Final investment decision on the Scarborough project, with US$ 5.7 billion (approximately 800 billion yen) development cost (100% basis) was taken by Woodside in November 2021.
As a 10% participating interest holder in the Scarborough Joint Venture, LNG Japan will cooperate with Woodside in developing the project, which is targeting first LNG cargo in 2026. LNG Japan will independently market and sell its equity LNG cargoes (up to 0.8Mtpa per year).
Sumitomo Corporation believes that natural gas and LNG are expected to play important roles in the global energy transition, and demand is expected to increase, especially in Asia where natural gas is required to displace coal and other higher carbon intensity fuel sources. In addition, the importance of energy security has recently been re-emphasized due to geopolitical risks. Through participation in the Scarborough Joint Venture, Sumitomo Corporation will contribute to the development of Australia and will further work towards the realization of a lower carbon society and provide a stable and secure supply of lower carbon energy, particularly in Japan and other Asian countries.
2. Collaboration towards the Establishment of a Decarbonized Society
Sumitomo Corporation has signed a non-binding Memorandum of Understanding with Woodside to collaborate in new energy which could include ammonia, hydrogen, carbon capture and storage (CCS), forestry and carbon management technology. Woodside and Sumitomo Corporation will explore collaboration opportunities to mitigate climate change and contribute to establishing a decarbonized society.
Sumitomo Corporation identifies “mitigation of climate change " as a significant societal challenge and is actively engaging in diverse business developments to establish a sustainable energy cycle, aiming to achieve carbon neutrality in its business activities by 2050. In collaboration with Woodside, which is also taking on the challenge of energy transition, Sumitomo Corporation and Woodside will utilize each other’s knowledge and experiences to work towards further business development and expansion.
【Overview of Scarborough project】
|Participating Interests (post acquisition)|| Woodside Energy Scarborough Pty Ltd 73.5%
Woodside Energy (Australia) Pty Ltd 16.5%
LJ Scarborough Pty Ltd 10%
|Final Investment Decision||November 2021|
|Expected commencement of Production
【Overview of LNG Japan Corporation】
||Sumitomo Corporation 50%, Sojitz Corporation 50%|
|Number of Employees
Approx. 100 (consolidated)
||・LNG export/import business (agency services etc)
・LNG gas development, gas field equity investment business
・Liquefaction project investment business
・LNG ship ownership and operations and other natural gas-related business
Sumitomo Corporation’s Material Issues
Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to the following material Issues.