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Business trends

Japanese trading houses push LNG projects in Asia

China's shift to natural gas from coal could open up lucrative opportunities

Demand for liquefied natural gas is growing as more countries try to limit their greenhouse gas emissions and reduce air pollution.   © Reuters

TOKYO -- Japanese trading houses are making big bets on liquefied natural gas as a relatively clean form of energy as regulations on greenhouse gases tighten worldwide. Companies such as MarubeniMitsui & Co. and Mitsubishi Corp. have all been expanding their LNG businesses in Asia and elsewhere.

This could put them in a good position to take advantage of efforts by China to address its air-pollution problem by switching from coal to natural gas.

Marubeni, for instance, has partnered with an Australian pipeline builder and is conducting preliminary work on an LNG receiving terminal, called a floating storage and regasification unit, in the state of New South Wales. The trading house may tap the local company to sell the gas.

In Thailand, Marubeni is considering operating an LNG tanker together with state-owned oil and gas giant PTT. It plans is to start supplying gas to LNG-powered ships at the country's largest commercial port as soon as 2019.

Marubeni and Russian gas supplier Novatek are also set to begin a feasibility study on building an LNG transshipment base in the waters off the Kamchatka Peninsula in the Russian Far East. The company may reach a decision to move ahead with the project this year.

In Indonesia, Marubeni is building an offshore LNG storage and regasification facility that it hopes to bring online in 2021. 

The company is also eager to buy concessions for LNG,  and has invested in projects in Qatar and Peru, with a presence in every stage of upstream to downstream production.

These moves are taking place alongside similar ones by other major Japanese trading houses 

In 2017, Mitsui & Co. took a stake in a floating storage and regasification project in Pakistan, led by a Norwegian company.

In the U.S., Mitsui is expected to start producing LNG from shale in the Gulf of Mexico this year.

The company is also preparing to start LNG development in the African nation of Mozambique with a view to starting production early in the fiscal year starting in March 2020.

Mitsubishi Corp., meanwhile, is working to increase capacity at its LNG facility on the Indonesian half of the island of New Guinea by 2020. The facility is jointly run with the U.K. company BP.

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