Tokyo: Japanese power company Jera Co. said Friday that it will acquire a 15.1 percent stake in the Scarborough gas field development project off northwestern Australia for about 1.4 billion U.S dollars.

A Jera subsidiary reached the deal with major Australian energy company Woodside Energy Group Ltd.

Gas production at the field is expected to start around 2026.

Jera is slated to procure up to 1.2 million tons of liquefied natural gas annually from the project. The amount is equivalent to about 3.4 percent of the 35 million tons the company currently handles each year.

Separately from the deal, Jera, which is owned equally by the Tokyo Electric Power Company Holdings Inc. group and Chubu Electric Power Co., signed a contract to buy about 400,000 tons of LNG from Woodside annually over the 10 years from 2026.

Thermal power generation using LNG as fuel emits less carbon dioxide than coal-based thermal power generation and is expected to help adjust the amount of power generation from renewable energy sources, whose output changes depending on weather conditions.

LNG is still necessary for power generation in Japan and other Asian nations, a Jera official said, suggesting that the company will continue efforts to diversify sources of LNG.

JIJI Press