Baker Botts advises LNG Japan on Australian gas field stake

Baker Botts LNG Japan Woodside Energy acquisition

Baker Botts represented LNG Japan Corporation’s wholly owned subsidiary LJ Scarborough to acquire a 10% stake in Woodside Energy’s Scarborough Joint Venture in Australia for USD500 million, subject to adjustments and government approvals.

The sale and purchase agreement means LNG Japan will have a non-operating participation interest in the joint venture gas project, which is 375 kilometres off the Western Australia coast.

“Demand for natural gas and LNG is anticipated to continue to rise as natural gas plays a significant role in the global energy transition, particularly in Asia where natural gas is vital for replacing coal and other higher carbon energy sources,” said Daniel Reinbott, a Baker Botts partner who led the Singapore-based team.

In assisting the transaction, Reinbott was supported by partner Michael Harrison, special counsel Giles Ashman and Jessica Ham, senior associate Michael Walton, and associates Celia Tan and Ciaran Mcilwham. The team worked together with Ashurst Australia, led by partner Jane Hall in Melbourne, together with partner Ratha Nabanidham and counsel Annabel Doneley, both based in Brisbane, who advised on Australian regulatory aspects of the transaction.

LNG Japan has agreed to reimburse Woodside for its portion of expenses from the Scarborough project incurred since 1 January 2022. This will bring the estimated total transaction amount – including the purchase price, reimbursed expenses and escalation – to USD880 million and is expected to be completed in early 2024.

The project is targeting delivery of the first LNG cargo in 2026, and when production starts, LJ Scarborough will sell its equity LNG cargo independently.