Japan’s largest power producer, Jera Co. Inc., said it would take a 12.5% interest in the Barossa natural gas project offshore Australia’s Northern Territory as it continues to secure additional liquefied natural gas (LNG) supplies.

Santos Ltd. sanctioned the $3.6 billion project earlier this year to develop the Barossa field to supply the Darwin LNG export terminal. The Bayu-Undan field currently supplying the terminal is expected to stop producing within a few years. 

The deal is expected to be completed in the first half of next year and would have an effective backdate of March 2020. Jera would pay Santos $300 million for its share of capital expenditures on the project from the effective date.

“Barossa is one of the lowest-cost, new LNG supply projects in the...