Australian petroleum exploration and production company Woodside Energy has signed a $1bn loan agreement with the Japan Bank for International Cooperation (JBIC).

Woodside intends to use the proceeds from the loan to support its Scarborough energy project, and further strengthen its balance sheet, to provide diversity of funding and liquidity.

The loan agreement follows a memorandum of understanding (MoU) between Woodside and JBIC, signed in November 2022.

The MoU is structured to secure a stable energy supply for Japan and help achieve its decarbonisation goals.

Woodside CEO Meg O’Neill said: “The loan reflected the longstanding relationship between the two companies and ongoing confidence from Japanese investors in Woodside’s Australian liquefied natural gas (LNG) projects.

“JBIC has supported all of Woodside’s milestone Australian projects including the North West Shelf, Pluto LNG and now Scarborough. It is therefore fitting that we have executed this agreement in the same week that Woodside celebrates 35 years of secure and reliable LNG exports to Japan.

“Investment in new Australian LNG supply, like Scarborough, can help Japanese customers meet their energy security needs while also supporting regional decarbonisation goals.”

The Scarborough Energy Project is expected to receive its first LNG cargo in 2026.

The work at the Pluto LNG facility is progressing with the ongoing arrival and installation of the Pluto Train 2 modules in Karratha, Western Australia.

Also, the subsea infrastructure installation and the drilling program continue while living quarters on the floating production unit have been installed on the topsides.

The loan agreement follows the previously announced sale of two non-operating interests in the Scarborough joint venture to JERA and LNG Japan.

JBIC deputy governor Kazuhiko Amakaw said: “The loan recognised Woodside’s important role, as the operator of major Australian LNG projects, in delivering stable energy supply for Japan.

“This loan will contribute toward securing long-term, stable supplies of LNG, which is an important energy resource for Japan.”