JERA Australia, a subsidiary of JERA, has agreed to purchase a 12.5% stake in the Barossa gas field, offshore Australia, from a subsidiary of Santos.

The deal allows JERA to involve in the project to develop a successor gas field for the Darwin LNG project. With a 6.1% stake, JERA is an existing partner in the LNG project.

The Barossa project will include the development of a gas field, located in Australian Northern Territory waters, and connection of it through a pipeline to the Darwin liquefaction plant for LNG production, which is expected to be commenced in 2025.

It will comprise a floating production, storage and offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline.

JERA is anticipated to receive around 0.425mtpa of LNG from the project, which is equivalent to its equity stake in the Barossa gas field.

Santos managing director and CEO Kevin Gallagher said: “JERA is a long-standing partner and customer at Darwin LNG. We are delighted to have finalised our agreement with JERA consistent with the terms of the Letter of Intent that was agreed shortly after the announcement of the acquisition of ConocoPhillips’ interests in Barossa.

“I welcome Jera as a partner in the Barossa project and look forward to continuing to build on the important long-term relationship between our two companies.”

Subject to customary consents, regulatory approvals and JERA entering into binding financing arrangements, the deal is expected to be completed in the first half of next year.

Upon completion, JERA will reimburse capital expenditure share for Santos on the project, which is expected to be around A$300m ($214m).

Once the deal concludes, Santos holds a 50% stake in the Barossa project, while SK E&S owns 37.5% stake and Jera holds 12.5% interest.