Woodside (WDS) Stock; Gains 2% on JERA Winter LNG Supply Deal

TLDRs;

• Woodside secures five-year winter LNG contract with JERA, signaling strong demand for Australian gas.
• Scarborough LNG project reaches 91% completion, first cargo expected second half of 2026.
• Woodside shares still exposed to crude swings and Asian gas prices, adding potential volatility.
• Q4 2025 and 2025 annual reports to provide key production and project updates.

Sydney, 15 January 2026, Woodside Energy Group Ltd (ASX: WDS) shares climbed 2% in early trading Thursday following news of a new winter liquefied natural gas (LNG) supply agreement with Japan’s largest power generator, JERA. The five-year deal, starting in 2027, will cover three LNG cargoes each winter, focusing on peak demand months in Japan.

Woodside Energy Group Ltd, WDS

Investors viewed the development as a positive signal for Woodside’s growing market presence and the progress of its flagship Scarborough project, which is nearing first gas production later this year.

Winter LNG Deal Boosts Sentiment

The agreement demonstrates Woodside’s ability to lock in long-term buyers in a market where winter LNG deliveries are highly sought after. While the deal alone represents a modest portion of total revenues, about 0.2 million tonnes per year, it highlights the company’s strategic positioning ahead of Scarborough’s operational debut.

“This deal confirms Woodside’s reliability as a long-term energy supplier for Japan,” said industry analysts, noting that winter LNG contracts often command a premium due to tight supply. JERA executives echoed the sentiment, stating that the agreement strengthens Japan’s energy security during high-demand months.

Scarborough Project Progress on Track

Woodside’s Scarborough project off Western Australia remains on schedule for first gas between July and December 2026. The project recently received its floating production unit from China, a critical milestone in development. Once operational, Scarborough is expected to contribute up to 5 million tonnes per year from Pluto Train 2, in addition to 3 million tonnes from Pluto Train 1.

Acting CEO Liz Westcott said that the focus is now on hook-up and commissioning ahead of production, with first LNG cargoes on track for the second half of the year. The floating unit is designed to compress and treat gas for export, a key step in feeding Woodside’s growing LNG portfolio.

Energy Market Factors Remain Key

Despite the upbeat news, Woodside faces ongoing exposure to global energy markets. Brent crude dipped to $64.85 per barrel on Thursday after easing fears of supply disruptions from Iran and reports of rising U.S. crude inventories. This pressured broader energy stocks in Australia, with peers such as Beach Energy and Santos posting losses.

While long-term LNG deals like JERA’s provide revenue visibility, the company’s share performance remains sensitive to short-term crude and Asian gas price fluctuations. Execution risks at Scarborough and Pluto expansions could also affect returns if delays or cost overruns occur.

Investors Eye Upcoming Reports

Traders are now focused on Woodside’s upcoming Q4 2025 report, due 28 January, followed by the company’s annual report for 2025 on 24 February. These updates are expected to provide clarity on project timelines, production volumes, and revenue contributions from key assets. Analysts will also be monitoring geopolitical factors, particularly oil supply developments in the Middle East, which influence both crude and LNG pricing.

Woodside recently issued shares related to employee equity plans, reflecting ongoing internal incentives but unlikely to materially impact valuations. Overall, the combination of the JERA contract and Scarborough’s progress has bolstered investor confidence, supporting the 2% gain in trading activity.

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