Sydney, 15 January 2026, Woodside Energy Group Ltd (ASX: WDS) shares experienced a notable 2% uptick in early Thursday trading, following the announcement of a pivotal winter liquefied natural gas (LNG) supply agreement with JERA, Japan’s leading power generator. This five-year contract, commencing in 2027, will provide three LNG cargoes each winter, precisely timed to meet peak demand months in Japan.
For investors, this development signals a positive trajectory for Woodside’s market presence while emphasizing the swift progress of its flagship Scarborough LNG project, which is approaching its first gas production phase later this year.
Winter LNG Deal Boosts Market Sentiment
The newly inked deal illuminates Woodside’s capacity to secure long-term buyers within a competitive market where winter LNG deliveries are regarded as highly valuable commodities. While the agreement amounts to a relatively modest 0.2 million tonnes per year in total revenues, it underlines the company’s strategic positioning ahead of the Scarborough project’s operational launch.
Industry analysts have praised the arrangement, indicating that it reinforces Woodside’s status as a dependable long-term energy supplier for Japan. Winter LNG contracts often carry a premium due to high demand during colder months, thus affirming Woodside’s resilience in the energy supply chain.
Scarborough Project on Track for Production
Continuing with positive developments, Woodside’s Scarborough project, located off the coast of Western Australia, remains on track for its first gas production between July and December 2026. This milestone was bolstered by the recent arrival of its floating production unit from China, marking a significant phase in the project’s advancement.
Acting CEO Liz Westcott emphasized that the current focus is on hooking up and commissioning the floating unit in preparation for production, with first LNG cargoes projected for the latter half of the year. This floating unit is instrumental in compressing and treating gas for export, thereby enhancing Woodside’s expanding LNG portfolio.
Market Factors Still Present Volatility
However, despite these positive strides, Woodside remains susceptible to fluctuations in the global energy market. On Thursday, Brent crude prices dipped to $64.85 per barrel, driven by easing concerns over supply disruptions from Iran and increasing U.S. crude inventories. Such conditions have cast a shadow over broader energy stocks in Australia, impacting peers like Beach Energy and Santos.
While long-term LNG contracts, such as that with JERA, provide essential revenue visibility, Woodside’s share performances are still influenced by short-term price movements in crude and Asian gas markets. Risks related to execution at Scarborough and alongside Pluto expansions could pose significant challenges if unforeseen delays or cost overruns occur.
Upcoming Reports Expected to Clarify Outlook
Looking ahead, traders are eagerly anticipating Woodside’s Q4 2025 report set for release on January 28, followed by the annual report on February 24. These anticipated updates are likely to shed light on project timelines, production volumes, and revenue contributions from crucial assets. Analyst attention will also be focused on geopolitical developments, particularly those affecting oil supply in the Middle East and their subsequent impact on pricing for both crude oil and LNG.
Woodside has recently initiated the issuance of shares tied to employee equity plans, a move that reflects ongoing internal incentives, albeit unlikely to substantially influence company valuations. In sum, the dual engines of the JERA contract and Scarborough’s forward momentum have significantly bolstered investor confidence, contributing to the notable 2% gain in trading activity today.
