Sempra Infrastructure has joined a partnership of Japanese gas utilities and major industrial groups studying the potential of using Gulf Coast LNG terminals to create an export hub for low-carbon, natural gas-backed fuels.
The unit of San Diego-based Sempra has agreed to support a study aimed at gauging the feasibility of exporting hydrogen or ammonia mixed with carbon dioxide (CO2), referred to as e-methane or syngas. Sempra is partnering with Osaka Gas Co. Ltd., Toho Gas Co. Ltd., Tokyo Gas Co. Ltd. and Mitsubishi Corp.
“The project would allow existing natural gas infrastructure, including the global liquefied natural gas supply chain and the gas distribution systems in nations across the world, to be used as the backbone for the delivery of a long-term, carbon-neutral fuel,” Sempra Infrastructure CEO Justin Bird said.
The consortium has proposed producing more than 143,000 tons/year of e-methane that would be exported to Japan through Sempra’s Cameron LNG terminal in Louisiana. The overall project would also include creating facilities on the Gulf Coast to mix e-methane and the procurement of hydrogen.
The study is estimated to continue until at least the end of 2023, with a final investment decision by 2025. The companies estimate that first production of e-methane could be achieved as soon as 2029. The first cargo could be exported to Japan by 2030, according to the timeline.
The Japanese utilities estimate the resulting e-methane production could meet around 1% of their combined annual city gas demand. Tokyo Gas and Toho Gas are offtakers from Cameron LNG. Osaka Gas, an offtaker of Freeport LNG, also has joined a study aimed at exporting 200,000 tons/year of syngas from the Texas facility.
Japan has committed to replacing 90% of the gas distributed in its cities with syngas by 2050 as a part of its transition to net-zero emissions. Syngas has been considered a cost-effective alternative for Japanese utilities, as CO2 could be stripped from the hydrogen and stored elsewhere.
The agreement with Sempra is the latest in a flurry of investments and partnerships between major Japanese LNG buyers and global producers to explore the country’s transition options.
In January, Jera Co. Inc. signed a tentative deal to invest in and become a key offtaker from CF Industries’ Donaldsonville blue ammonia complex in Louisiana. Jera is Japan’s leading power producer and one of the world’s top buyers of LNG with around 16 mmty under long-term contracts.
The Gulf Coast also has been targeted for a potential hydrogen and ammonia facility by Chevron Corp, Air Liquide SA, LyondellBasell and Uniper SE. Jera announced a partnership last year with Chevron to pursue decarbonization projects, including carbon capture, utilization and sequestration (CCUS) and other investments on the Gulf Coast.
Sempra also is developing its own CCUS project in Hackberry, LA, that could support decarbonization of Cameron LNG. It has been backed by Mitsubishi and other existing equity partners in Cameron.
The potential ramp-up of syngas also could place a premium on CCUS projects and the shipping of CO2 as firms across the world increasingly hinge their net-zero transitions on stripping and storing excess emission. Earlier in the month, Osaka Gas and a consortium of Japanese and Australian companies launched a project to explore liquefying and shipping CO2 to offshore CCUS facilities.
