Woodside Energy (ASX:WDS) has confirmed its completed the sale of a 15.1% stake in its controversial Scarborough project to Japan’s JERA.

A sum of US$1.4B now comes Woodside’s way via JERA’s acquisition of equity in the project.

Controversy surrounding Scarborough – in the eyes of some – is perhaps not hard to predict. Opponents of the project are concerned about estimated carbon emission loads to come from the project over its life.

Western Australia’s North West Shelf is already one of the largest greenhouse gas source points in this part of the world.

While some allege Australia’s carbon emissions are dropping, that only counts for CO2. Carbon is one part of “greenhouse gases,” so just looking at carbon doesn’t really help anything.

Gas projects also release methane, a more potent greenhouse gas which to date does not receive as much scrutiny or focus as CO2 emissions on a standalone basis. (Globally, greenhouse gas emissions are at all time highs.)

One reason Joe Biden was unable to push through his Build Back Better legislation – before it became the Inflation Reduction Act (IRA) – was due to strict regulations around methane emissions that industry in the US balked at.

Australia has never meaningfully gone for tough legislation on methane – beyond joining a “global methane pledge.”

Regardless, the overall deal brings in US$1.4B for Woodside not long after the company saw an appeal against the project led by the Australian Conservation Foundation (ACF) dismissed. JERA’s stake is a non-operational participating interest.

JERA, for the uninitiated, is Japan’s largest power generation company. Its participation in Scarborough will mirror INPEX’s involvement in Northern Territory gas projects further along the northern coast.

Woodside and JERA both moved to expand a “strategic relationship” earlier this year in the project but the utility had long been interested in getting involved.

“That relationship reflects our shared view that gas will play an important role in the global energy transition for decades to come,” Woodside CEO Meg O’Neill said.

O’Neill pointed to the importance of Australian LNG for Japan’s energy security – and also claimed the project will produce gas into the WA domestic market.

WDS last traded at $23.88.

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