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Energy

Japan strives to lessen LNG supply chain's environmental burden

Partnership with Australia and ASEAN nations comes amid divestment trend

Japan, the largest consumer of liquefied natural gas, hopes to keep funds flowing to gas field development projects.

TOKYO -- Japan will collaborate with Australia and Southeast Asian nations to reduce the burden that the entire LNG supply chain puts on the environment, Nikkei has learned.

Word of the collaboration comes as some investors are beginning to act on their environmental concerns and as Japan looks to stabilize its procurement of energy resources.

Industry Minister Hiroshi Kajiyama will announce the decision on Monday at the LNG Producer-Consumer Conference, to be held virtually on Monday.

Japan is the largest consumer of liquefied natural gas, accounting for 20% of global consumption. The nation uses the gas to generate nearly 40% of its power. City utilities also pipe it to residents.

But Japan's procurement of LNG could be impeded if more investors and banks divest from fossil fuels and end up impacting the funding for gas field development projects.

At the same time, competition for LNG is expected to increase from emerging countries. It is estimated that 70% of the expected increase in demand through 2030 will come from the Asia-Pacific region.

Meanwhile, Japan is promoting the idea of capture and storage to strengthen its environmental standing. In this approach, carbon dioxide that is generated at the production field is immediately collected and buried.

The Ichthys LNG Project in Australia, which covers 7% of Japan's LNG demand, will adopt the method by collaborating with Japan Oil, Gas and Metals National Corporation as well as with Australian companies.

Japan will consider bringing capture and storage operations to other Asian countries like Indonesia and Malaysia. In addition, it says it will try to commercialize a "zero-emission ship" that does not emit carbon dioxide while transporting LNG.

The burning of LNG is said to emit half as much carbon dioxide as coal.

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