Japan’s largest power generation enterprise JERA has signed an agreement with a subsidiary of Australian energy developer Santos [STO:AU], to raise its share in the latter’s Barossa gas field project from 6.1% to 12.5%, as reported by NT Independent on December 19. The two parties expect to complete the transaction in 1H22 and start producing liquefied natural gas (LNG) in the Barossa project in 1H25. Upon completion, the project would be linked with Australia’s Darwin liquefaction plant and supply around 425,000 tons of LNG to JERA. In return, the Japanese company would pay Santos around AUD300m (USD216.5m) to share the project’s overall expenditure.
Before the transaction, JERA had secured stable LNG supply from the Darwin liquefaction plant since 2006 with 2m tons of LNG procurement per year. Last November. JERA also purchased a 25.7% equity in the US LNG producer, Freeport LNG, to achieve 820,000 tons of gas supply per year. However, these investments would be considered as expediency in Japan’s green transition to renewable energy. In July, the country drafted a national energy development plan where it aims to cut the electricity generation from natural gas by 50% in 2030 compared with the current output. As the world’s largest LNG importer, Japan’s LNG purchased 83.63m, 82.85m, 77.33m, and 74.40m of LNG from overseas between 2017 and 2020, dropping for three years in a row.