The deal will give Osaka Gas access to a long-term source of LNG as the Japanese utility seeks to strengthen and diversify its energy supply portfolio.
Osaka Gas said on Friday that the acquisition would be carried out through Osaka Gas Browse, a company to be jointly owned by Osaka Gas Australia and Japan’s state-backed Japan Organization for Metals and Energy Security (JOGMEC).
The transaction remains subject to regulatory approvals as well as consent from the other partners in the Browse joint venture.
Osaka Gas did not disclose the financial value of the transaction or other commercial terms.
The Browse project consists of three major gas fields — Brecknock, Calliance and Torosa — located in the Browse Basin off the coast of Western Australia. The development is currently at the pre-front-end engineering and design, or Pre-FEED, stage, meaning detailed planning and engineering work is still being undertaken before the project moves toward full development.
Operated by Woodside Energy, Browse is regarded as Australia’s largest undeveloped gas resource. The project is planned to provide additional gas to support the North West Shelf LNG facility in Western Australia, one of the country’s major LNG production and export hubs.
Once developed, Browse is expected to produce approximately 11 million metric tons of LNG annually.
For Osaka Gas, the investment is expected to translate into a significant volume of LNG supply. Based on its 5% interest, the Japanese utility expects to secure approximately 550,000 tons of LNG per year from the project.
The acquisition also brings together Osaka Gas and JOGMEC in a new partnership aimed at securing energy resources for Japan. For the Japanese utility, participation in an Australian gas development provides an opportunity to strengthen its access to LNG from a major regional producer while broadening its upstream energy interests.
The Browse development has been under consideration for years as Woodside and its partners work through the technical, commercial and regulatory requirements needed to bring the offshore gas resources into production.
The latest agreement marks another step toward Osaka Gas' participation in the project, although the company will still require the necessary approvals before the transaction can be completed.