Tokyo Gas [9531:JP], Japan’s largest gas utility firm, announced a collaboration with Australian energy company Santos [STO:AU] to manufacture carbon-neutral synthetic methane, or e-methane, in Australia for export to Japan, as reported by Nikkei Asia on November 21. The two companies will first study the feasibility of the project. If practical, they look to establish a new production plant at the Cooper Basin in mid-eastern Australia, known for its renewable resource potential for green hydrogen production and Santos’ ongoing trials of Direct Air Capture (DAC) technology. Moreover, the region also hosts one of the world’s largest carbon capture and storage (CCS) projects, set for its first injection in 2024. Anticipated to commence operation by 2030, the plant is projected to produce 60,000 tons of e-methane annually, equivalent to 1% of Tokyo Gas’s annual gas sales.

E-methane is created by combining green hydrogen with CO2 sourced from the carbon capture of industrial emissions or DAC technology. It has almost the same chemical composition as city gas and can therefore be integrated into existing gas infrastructure. This gives methane an advantage over hydrogen, the use of which would require substantial investments in transport and storage infrastructure. Japan’s three major gas utilities have set out targets to replace 1% of city gas sales with e-methane in 2030, aiming to leverage this fuel to mitigate their carbon footprints. Furthermore, the broader goal within Japan’s gas industry is to replace 90% of its city gas supply with e-methane by 2050.

Sources:

https://asia.nikkei.com/Business/Energy/Tokyo-Gas-teams-up-with-Santos-for-Australia-green-methane-study

https://www.marketscreener.com/quote/stock/SANTOS-LIMITED-6491535/news/Santos-and-Tokyo-Gas-to-collaborate-on-carbon-neutral-e-methane-in-Australia-45402222/

https://www.santos.com/news/santos-and-tokyo-gas-to-collaborate-on-carbon-neutral-e-methane-in-australia/