Page 8 - AsiaElec Week 04 2021

AsiaElec INVESTMENT AsiaElec

Sumitomo to stop investing in new oil projects

JAPAN JAPANESE trading house Sumitomo Corp said that it has signed a front-end engineering and
it would stop investing in new oil development design contract with JGC Holdings Corp. for a
projects as it shifts away from fossil fuels busi- solar-powered green hydrogen production plant
nesses amid a global push to cut greenhouse gas in Gladstone, Australia. The plant will produce
emissions, the Nikkei reported. 250-300 tonnes per year of hydrogen, and could
The move comes as global miners and Jap- scale up in the future.
anese trading companies cut their exposure to It has also started a feasibility study for a grey-
coal operations, including mining and power green hybrid hydrogen project in Oman.
generation to trim harmful carbon dioxide emis- However, Sumitomo is still committed to
sions and to slow climate change. coal projects, and is continuing to invest in coal
Major Japanese trading houses have said they in Indonesia, Vietnam and Bangladesh. It is also
would stop investing in new projects to develop intending to develop a second coal power project
thermal coal mines or build coal-fired power in Bangladesh.
stations, but this would be the first time that a This is despite booking US$250mn loss from
Japanese trading firm decided not to invest in its Western Australian Bluewaters coal-fired
new oil projects, the Nikkei said. power station. The loss ensured that 2020 was
Sumitomo will no longer participate auctions the company’s worst-ever annual performance.
for new oil projects, though it will continue its Other Japanese investors, such as Mitsubishi
existing oil projects including those in North Sea, Corp, Marubeni and Mitsui, have divested form
the paper said, without citing sources. coal production across Asia.
In energy and natural resources, Sumitomo The Japanese government in October 2020
will focus its management resources on renewa- said it target net-zero emissions for the nation by
ble energy such as offshore wind farms and base 2050. This is the most significant shift in Japanese
metals, including copper and nickel used in elec- energy policy yet and will see a further, long term
tric vehicles, the Nikkei said. move away from coal towards renewables.™
For example, Sumitomo has announced

FUELS

China’s city-gas operators enjoy winter rush

CHINA CHINA’S coldest winter in decades has proved 2020.
to be a boon for the country’s city-gas operators, The agency was upbeat about the country’s
which have seen fuel demand skyrocket. ability to meet the surge in demand, however,
City-gas operators saw their gas sales volume noting: “China’s gas supply pressure is lower this
growth accelerate in both the fourth quarter of winter than in 2017. As a result, we believe the
last year as well as in the year to date, interna- spike in gas demand can be fulfilled to a large
tional ratings agency Fitch Ratings said in a new extent, translating into strong gas sales volume
report published on January 20. The agency cited growth for rated gas distributors.”
both the country’s post-pandemic industrial Top economic planner the National Develop-
production recovery as well as strong heating ment and Reform Commission (NDRC) said in
needs as the principal drivers. November that the country’s gas supplies would
Fitch quoted the Chongqing Petroleum and be enough to meet peak winter demand, after
Gas Exchange as saying that apparent gas con- it had directed the state-run majors to boost
sumption growth had accelerated from 5.9% domestic production and imports.
in October 2020 to a low-teen percentage in Fitch noted that the majors’ efforts to enhance
November 2020 through to January. storage facilities in the wake of the 2017 winter
The spot LNG price, meanwhile, is under- gas shortage meant that supply from these facil-
stood to have risen by more than 100% in ities had topped 100mn cubic metres per day,
northern China and 60% in southern China accounting for 9.7% of total daily gas consump-
since November 2020. Fitch noted that prices in tion. The majors are also understood to have
Hebei, Jilin, Liaoning and Shandong Provinces opted to move some of their long-term contract
had climbed to more than CNY10,000 ($1,544) deliveries into the winter period, while new LNG
per tonne in late December from an average of terminals and pipelines have also contributed
CNY2,700 ($4,168) per tonne in June-August additional supply.™

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