LNG

The Japan Bank for International Cooperation (JBIC) has signed an agreement with Abu Dhabi National Oil Co. (ADNOC) to proceed with further discussions for financing under the bank’s decarbonisation programme as ADNOC and a subsidiary have also pledged to continue supplying LNG to the Japanese along with long-term crude oil supplies.

“ADNOC is a leading energy company wholly owned by the Emirate of Abu Dhabi with a clear intent to decarbonise its operations,” said JBIC.

“It has ambitions of achieving net zero emissions by 2045, promoting renewable energy, hydrogen and ammonia, carbon capture and storage (CCS), and other green energy initiatives,” explained JBIC in regard to the leading energy company in the United Arab Emirates.

“The heads of agreement is intended to aim at building a consensus in which JBIC will provide a credit line to ADNOC under ‘green operations’ to support projects related to decarbonisation and the energy transition implemented by ADNOC or its subsidiaries,” the state-owned Japanese bank added.

Carbon-capture and storage (CCS) is a technology that separates and captures CO2 that would otherwise become a greenhouse-gas and stores it in deep-water caverns or other geological formations.

ADNOC spin-off

ADNOC Gas, which was spun-off in March 2023 to become a separate company, is estimated to have the seventh-largest gas reserves globally and has signed supply agreements with Japanese companies.

The latest was signed in October 2023 with the trading subsidiary of Japan's power generation company Jera Co. Inc.

The multi-year agreement with Jera Global Markets, a utility-backed energy trader specialising in LNG and other fuels, builds on the energy partnership between the UAE and Japan.

The ADNOC gas subsidiary also signed a five-year LNG supply agreement with Japan Petroleum Exploration (JAPEX) in August 2023.

JBIC noted that in addition to supplying LNG to Japanese import terminals the UAE emirate of Abu Dhabi was also key and long-term supplier of oil to Japan.

“As a stable and important supplier of crude oil to Japan for more than 40 years, Abu Dhabi is a strategic partner and a very important ally for Japan's energy resources strategy,” said JBIC.

High potential

“In addition, Abu Dhabi has high potential in the sector of decarbonisation and energy transition as it has abundant resources for renewable energy and subterranean structures suitable for CCS,” JBIC explained.

“The credit line under the HOA aims to support ADNOC’s initiatives for decarbonisation and to create opportunities for collaboration between Japanese companies and ADNOC, and it is expected to contribute towards realising the decarbonised societies that Japan and Abu Dhabi are aiming for,” JBIC declared.

As Japan's policy-based financial institution, JBIC said it would continue to provide financial support for sustainable development efforts, including those for global environmental preservation, by drawing on its various financial facilities for structuring projects financially and by “performing its risk-assuming” function.

JERA Co. Inc, Japan’s biggest liquefied natural gas importer and utility company, said it expected the LNG demand-supply imbalance to be less serious this winter season than last because the forecast milder weather, the high storage held in Europe and the delayed resurgence of the economy in China.

JERA, which buys around 35 million tonnes per annum of LNG and is Japan’s biggest fossil-fuel electricity generator being owned jointly by Tokyo Electric Power and Chubu Electric, the two largest power companies, gave the LNG market forecast in a company earnings presentation

The presentation in Tokyo was led by JERA President and Chief Executive Hisahide Okuda.

JERA, which currently oversees the operations and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals, said the only issue to be concerned with was that of the unexpected.

Potential issues

“Since overall global supply has not grown, there is the potential for LNG production issues on the supply side - a problem at any LNG plant could cause prices to jump. We believe, therefore, that the environment for LNG procurement remains unpredictable,” Okuda explained.

“Turning to LNG fundamentals, although demand for LNG is growing, particularly in Europe, LNG supply is not expected to catch up to that demand until around 2025, leading to a tight supply-and-demand situation,” the CEO said.

“However, at JERA, in addition to building an LNG portfolio that combines long-term, short-term, and spot contracts, we also secure a stable fuel supply by flexibly optimizing procurement and resale through JERA Global Markets,” Okuda added.

He noted that the company was also following the “Strategic Buffer LNG (SBL)” plan proposed by the Ministry of Economy, Trade, and Industry (METI) whereby at least one LNG carrier-load of surplus LNG per month between December and February can be supplied to any domestic operators as determined by METI.

According to METI and its Policy Subcommittee on Electricity and Gas, Japan will have a winter’s reserve margin exceeding the 3 percent minimum necessary to ensure stable supply.

“JERA, however, is taking nothing for granted. We will be doing our utmost to secure both kilowatts and kilowatt hours in order to ensure stable power supply,” CEO Okuda stated.

Older plants

“JERA is moving steadily forward in replacing older thermal power plants with state-of-the-art facilities. Six units, totaling 4.32 million kilowatts, whose replacement has already been completed, have begun commercial operation,” he added.

The CEO declared that looking to 2024, JERA would continue moving forward with an additional 2.99 million kilowatts in power plant replacement.

“We believe that moving decisively in this way to upgrade power sources is an important part of ensuring safety,” Okuda said.

In addition, given the smooth progress of trial operations at Yokosuka Thermal Power coal-fired power plant’s Unit 2, we will be moving its start of commercial operation forward from February 2024 to December 2023, which will also contribute to this winter’s supply capacity,” the CEO said.

The Yokosuka coal-fired plant is described by JERA as a “high-efficiency coal-fired power station that uses an ultra-supercritical (USC) power generation” system.

“Its generating capacity of 650 megawatts will contribute to a stable electricity supply,” Okuda added.

The JERA CEO said that the company was also moving forward with carbon-capture and storage projects in Asia.

JERA is carrying out joint research with Japanese LNG and energy engineers JGC Holdings Corp. and the Indonesian state electricity company Perusahaan Listrik Negara (PLN) on a project to introduce and commercialise CCS for thermal power.

“With these projects and others, we are collaborating on decarbonisation with a growing number of Asian countries including Bangladesh, Thailand, Malaysia, the Philippines, Vietnam, Indonesia and Singapore,” Okuda said.

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, reported an almost 8 percent increase in quarterly revenues and a swing to profit compared with a loss in the same three months of last year.

JERA Co. Inc, the main Japanese LNG importer, has decided to issue its first energy transition bonds and spend part of the proceeds on decommissioning older thermal power stations.

JERA Co. Inc., the main Japanese LNG importer, is taking a series of new measures to ensure a stable supply of electricity in Japan in the face of a changing market and geopolitical events.

JERA Co. Inc., the largest Japanese liquefied natural gas buyer with 35 million tonnes per annum of volumes and control of a fleet of 20 LNG carriers, has launched the environmental impact process for upgrading one of its key power plants at Chita in Aichi Prefecture.

JERA is Japan’s biggest fossil-fuel generator being owned jointly by Tokyo Electric Power Co. and Chubu Electric, the two largest power companies.

The joint venture company currently operates and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals.

JERA’s power plants have 70 gigawatts of capacity and the company is in the process of upgrading existing LNG and steam plants and also proposes to close its 2.2GW of coal-fired plants by 2030.

The current project for Chita in the Chubu region, whose capital is Nagoya, is for the construction of new Units 7 and 8 at the plant which will use the most modern combined-cycle gas-fired plant technology to make more efficient use of LNG imports.

The new gas-fired plants are expected to come on stream in August and December 2027.

JERA is one of the world’s largest LNG buyers and traders, taking volumes from leading global liquefaction plants.

In its plans for Chita, the older parts of the plants, units 1 to 5 with a combined 3,112 megawatts and using steam and LNG, are being decommissioned over the next few years through fiscal 2026.

The new Units 7 and 8 will then operate alongside the existing Unit 6 gas-fired re-powering plant, giving combined capacity of 2,154MW.

“In order to reduce carbon-dioxide emissions, for new units 7 and 8 the plan adopts the latest high-efficiency combined-cycle power generation system (with gross thermal efficiency of approximately 63 percent),” said JERA.

“In addition, the environmental burden due to smoke and warm wastewater is expected to be lower when the plan has been carried out than for operations at the existing facility,” stated JERA.

JERA has submitted the Environmental Impact Assessment to Japan’s Minister of Economy, Trade and Industry (METI), the Governor of Aichi Prefecture, the Mayor of Chita City and the Mayor of Tokai City, in accordance with the Environmental Impact Assessment Law and Electricity Business Act.

JERA said the documents would be made available for public review at the administrative agencies listed above and public meetings in the relevant areas are scheduled for the 26th March, 2021.

“People with opinions from an environmental conservation standpoint are invited to submit them via post or to drop them in boxes available at the public review locations,” explained JERA.

“JERA will continue to move forward with the environmental impact assessment process, giving due consideration to the opinions of other stakeholders,” it added. 

JERA Co Inc., the largest Japanese LNG buyer, said it signed an accord with ExxonMobil and the city government of the Vietnamese port of Haiphong to work together on a potential integrated LNG-to-Power project for the Port.