INTERVIEW: Japan’s Jogmec keen to support energy transition projects in Saudi Arabia, UAE

Japan

Japan Oil, Gas and Metals National Corp. is keen to support energy transition projects in Saudi Arabia and the UAE, countries that are making inroads into new areas of energy while maintaining their traditional fossil fuels industries, the company’s Chairman and CEO Tetsuhiro Hosono told S&P Global Commodity Insights in an interview in Abu Dhabi.

Hosono said he met with UAE energy minister Suhail Mazrouei in Abu Dhabi and other “powerful” people in recent days as part of bilateral talks to develop new partnerships in various projects including hydrogen, ammonia and carbon capture.

He said that in Saudi Arabia Jogmec is “exploring” possible partnerships in hydrogen and ammonia production and storage, R&D, and human resource development following a memorandum of cooperation with Saudi Aramco signed in October, he said.

“When it comes to the UAE since we are enjoying long-term relations in oil and LNG supply, there is actually an ongoing project with respect to ammonia in the works,” he said. He declined to elaborate.

Japan was already looking to develop new sources of energy before Russia’s invasion of Ukraine, which has led to Japan ceasing crude oil imports from Russia. Last year, INPEX said it wanted to explore the commercial potential of a clean ammonia production business in Abu Dhabi in cooperation with state-owned ADNOC and Japanese company JERA and Jogmec. In June, INPEX, IHI Corp. and Mitsui OSK Lines successfully completed shipping of a clean ammonia cargo to Japan from the UAE.

Japan meanwhile remains hugely dependent on Middle Eastern crude oil. The region accounted for 95.6% of its imports in September, with the UAE and Saudi Arabia the largest suppliers, according to data from the Ministry of Economy, Trade and Industry.

Aramco MoC

The memorandum of cooperation Jogmec signed with Saudi Aramco will see it potentially provide risk capital for hydrogen and ammonia production projects in Saudi Arabia, along with carbon capture.

“We believe the strengthening relations with Saudi Aramco is very important going forward,” he said.

“There are many possibilities” that could result from the Jogmec-Aramco cooperation, he said, highlighting ammonia, hydrogen, R&D and human resource development, but added that “we are still in the exploration stage.”

Saudi Arabia and Japan used to have a partnership in oil production in Saudi Arabia through a Japanese company called Arabian Oil Co., but the contract was not renewed in 2000.

“Since the relations with Saudi Arabia are so important for us we didn’t want the relationship to be just a relationship between buyer and seller,” Hosono said. “We have long considered ways to establish a relationship that is going into new dimensions as opposed to just a buyer and seller relationship.”

New direction

Jogmec itself is moving in a new direction, changing its name to Japan Organization for Metals and Energy Security as of Nov. 14. It has new objectives from the government, and has decided to expand and promote new initiatives in the field of hydrogen and ammonia production and storage, as well as R&D and carbon capture and storage (CCS) and carbon capture, utilization and storage (CCUS).

“Saudi Arabia and the UAE as well as other Middle Eastern countries are now motivated to maintain fossil fuel production but at the same time they are making inroads into new areas such as renewables, hydrogen and ammonia,” Hosono said. “Our interests are now closely aligned with Saudi Arabia. This kind of situation, I would say, is serving as a kind of springboard.”

Japan can provide funding support and innovation and technical support, he said. “In that sense, we are attracted to the Middle East,” he said.

He noted that Jogmec support would always be specifically for Japanese businesses. “Strictly speaking I don’t believe the Middle East countries have much need when it comes to funding but they need technology and innovation,” Hosono said. “We mainly provide support to Japanese business so they can make contributions to companies like ADNOC through our support.”

Asked if Japan expects to get hydrogen or ammonia in return, he said: “That’s not everything, but I would say that is part of the clearest outcome through our efforts, and it could contribute to the energy security in the area.”

Source: Spglobal.com