JERA to Invest in the Barossa Gas Field in Australia to Secure a Stable LNG Supply2021/12/08

JERA Co., Inc. (“JERA”) has decided to invest, through its subsidiary JERA Australia Pty Ltd., in the Barossa/Caldita gas field in Australia and has today concluded an equity purchase agreement with a subsidiary of Santos Ltd., a major resource development company in Australia, to acquire a 12.5% stake in the gas field. The acquisition is expected to be finalized after the necessary approval and authorization procedures.

As a result of this acquisition, JERA will participate in the project to develop a successor gas field for the Darwin LNG project in Australia (the "Project").

JERA participated in the Darwin LNG project in 2003. That project has produced LNG at the Darwin liquefaction plant using natural gas supplied from the Bayu-Undan gas field, located in waters off Timor-Leste, and contributed to the stable supply of LNG for approximately 15 years since production began in 2006.

Production at the Bayu-Undan gas field is expected to end within a few years. Development of the Barossa gas field as a successor to supply feed gas to the Darwin LNG liquefaction plant is now underway.

The Barossa gas field is located in Australian waters off the Northern Territory of Australia. The Project will develop the Barossa gas field and link it by pipeline to the Darwin liquefaction plant for LNG production, which is expected to start around 2025. JERA will receive about 0.425mtpa of LNG from the Project which is equivalent to its equity stake in the Barossa gas field.

In Asia, there is demand both for decarbonization and for a stable energy supply to support economic growth. Gas-fired power generation—which emits less CO₂ than power generation using other fossil fuels—can be a flexible supplement to intermittent renewable energy, and demand for it as an energy source indispensable to promoting the energy transition is expected to continue to grow. Securing a stable supply of competitive LNG, therefore, is becoming increasingly important.

Because the Barossa gas field is medium-sized, and existing facilities such as the Darwin LNG project’s liquefaction plant, an LNG storage tank, and jetty can be utilized, the Project enables JERA to secure highly competitive LNG with extremely low development risk. By leveraging the knowledge and expertise it has accumulated through its global LNG value chain business, JERA will work together with its partners to develop the Project and ensure a stable supply of LNG to the global market, including to Japan and to gas-to-power projects in Asia.

In addition, JERA will also work with its partners to study the development of zero-emission projects and to evaluate CCS projects. Through these initiatives, JERA will evaluate opportunities for the reduction of CO₂ emissions from the Project with the partners.

Under its “JERA Zero CO₂ Emissions 2050” objective, JERA has been working to reduce CO₂ emissions from its domestic and overseas businesses to zero by 2050, to promote the adoption of greener fuels, and to pursue thermal power that does not emit CO₂ during power generation. JERA also plans to establish decarbonization roadmaps optimized for each country and region and to promote zero-emission initiatives that follow these roadmaps.

Leveraging its long experience in the LNG value chain businesses, JERA will follow the decarbonization roadmaps it is drawing up for each country and region as it strives to expand the adoption of LNG—a transitional fuel indispensable for achieving decarbonization—and to contribute to global decarbonization and energy solutions.