Current as of: 13 October 2022
A new study looking across Bangladesh, Thailand and Vietnam, the sites of the three largest gas power project expansions (outside China), identifies the Japanese companies most actively pursuing a liquefied natural gas (LNG) buildout in Asia, putting the climate goals of the Paris Agreement in peril.
Japanese companies are collectively attempting to back 15 proposed LNG power projects that would add 33.2 GW of thermal power capacity. Beyond these power projects, 7 LNG import terminals and FSRUs are also proposed involving Japanese companies. JERA (a joint venture of TEPCO and Chubu Electric), Mitsubishi Corporation and SMBC Group, are among the worst offenders.
This buildout is being proposed despite the International Energy Agency (IEA)’s landmark scenario stating we need to stop adding fossil fuel supply if we are to achieve the goal of net-zero emissions globally by 2050, warning that much of the proposed and even existing LNG infrastructure risks becoming stranded.
Planned LNG projects involving Japanese companies in Bangladesh, Thailand and Vietnam alone would counteract Japan’s 2030 Nationally Determined Contributions target more than three times over.
Japanese companies and the buildout of LNG power in Bangladesh, Thailand and Vietnam
Market Forces reviewed the LNG projects slated for Bangladesh, Thailand, and Vietnam, the countries with the three largest gas power project buildouts in Asia after China (according to the Global Energy Monitor’s (GEM) Asia Gas Plant Tracker (April 2022) based on capacity under construction and proposed).
Japan and the USA play a key role in the planned buildout of LNG projects in Bangladesh, Thailand and Vietnam. Of all foreign domiciled companies involved, one third of the proposed LNG to power capacity involves Japanese companies.
Of the Japanese companies, JERA (joint venture of TEPCO and Chubu Electric), Mitsubishi Corporation and SMBC Group are among the most heavily involved:
- JERA is involved in 5 proposed LNG to power projects totalling 11,600 MW in Bangladesh and Vietnam.
- Mitsubishi Corporation is involved in 1 proposed LNG power project totalling 1,500 MW in Vietnam (Table 1).
- JERA and Mitsubishi Corporation rank among the top Japanese companies in terms of MW capacity of proposed LNG to power projects (excluding those involved at the feasibility study level) (Table 1).
- JERA and Mitsubishi Corporation are also involved in, or expected to be involved in 4 proposed LNG terminals in Bangladesh and Vietnam (Table 2).
- SMBC Group is the only Japanese commercial bank with known involvement in proposed LNG power projects in Bangladesh and Vietnam at this stage. It is expected to be involved in funding 2 LNG projects in Vietnam with 3 GW capacity. SMBC is also the financial adviser of the 1.4 GW Pertamina LNG Power Plant proposed in Bangladesh. The only other known prospective lender from Japan is the public financial institution JBIC (Japan Bank for International Cooperation).
Table 1: Involvement of Japanese companies in proposed LNG to power projects
| Order | wdt_ID | Japanese Companies (all roles except feasibility study) | Number of Projects | Total capacity |
|---|---|---|---|---|
| 1 | 1 | JERA | 5 | 11,600 |
| 14 | 2 | Mitsubishi Corporation | 1 | 1,500 |
| 2 | 3 | Sumitomo Corporation | 2 | 6,200 |
| 3 | 4 | JBIC | 3 | 6,150 |
| 4 | 5 | ENEOS (formerly JXTG) | 1 | 6,000 |
| 5 | 6 | Tokyo Gas | 2 | 4,700 |
| 6 | 7 | SMBC Group | 3 | 4,400 |
| 7 | 8 | Mitsui & Co | 2 | 3,830 |
| 9 | 9 | Kyushu Electric | 3 | 3,100 |
| 11 | 10 | Sojitz | 3 | 3,100 |
| 8 | 11 | Osaka Gas | 1 | 3,200 |
| 12 | 12 | J-Power | 1 | 3,000 |
| 13 | 13 | Marubeni | 2 | 2,900 |
Table 2: Combined list of projects with JERA, Mitsubishi Corp and SMBC involvement
| Company | Type of LNG asset | Project name | Size | Unit | Country | Role |
| JERA | LNG Power Plant | Bac Lieu (I, II, II + IV) | 3200 | MW | Vietnam | LNG Supply Bidder |
| Ca Na I | 1500 | MW | Vietnam | Sponsor (Prospective) | ||
| Hai Phong I, Units 1, 2, 3 (Tien Lang) | 2250 | MW | Vietnam | Unclear - signed MoU with sponsor | ||
| Hai Phong I, Units 4, 5, 6 (Tien Lang) | 2250 | MW | Vietnam | Unclear - signed MoU with sponsor | ||
| Matarbari Summit LNG Power Plant | 2400 | MW | Bangladesh | 22% Shareholder of Summit, one of the JV owners of the plant | ||
| Terminal | Ca Na LNG Terminal | 97000 | tonnes | Vietnam | Sponsor (Prospective) | |
| Matarbari LNG Terminal (onshore) | 7.5 | mtpa | Bangladesh | Bidder | ||
| Matarbari Summit LNG Terminals (onshore and FSRU) | 1500 | mmscf/d | Bangladesh | 22% Shareholder of Summit, one of the JV owners of the project | ||
| Tien Lang 1 Industrial Park Hai Phong Terminal | 6 | mtpa | Vietnam | Unclear - signed MoU with sponsor | ||
| Mitsubishi Corporation | LNG Power Plant | LNG Long Son I | 1500 | MW | Vietnam | Sponsor |
| Terminal | Matarbari LNG Terminal (onshore) | 7.5 | mtpa | Bangladesh | Bidder | |
| Matarbari Summit LNG Terminals (onshore) | 1000 | mmscf/d | Bangladesh | Sponsor | ||
| SMBC Group | LNG Power Plant | Nhon Trach 3&4 | 1500 | MW | Vietnam | Lender |
| Pertamina LNG Power Plant | 1400 | MW | Bangladesh | Adviser | ||
| Quang Ninh I (Cam Pha) | 1500 | MW | Vietnam | Lender (Prospective) |
| wdt_ID | Company | LNG Asset | Project name | Size | Unit | Country | Role |
|---|---|---|---|---|---|---|---|
| 1 | JERA | LNG Power Plant | Bac Lieu (I, II, II + IV) | 3,200.0 | MW | Vietnam | LNG Supply Bidder |
| 2 | JERA | LNG Power Plant | Ca Na I | 1,500.0 | MW | Vietnam | Sponsor (Prospective) |
| 3 | JERA | LNG Power Plant | Hai Phong I, Units 1, 2, 3 (Tien Lang) | 2,250.0 | MW | Vietnam | Unclear - signed MoU with sponsor |
| 4 | JERA | LNG Power Plant | Hai Phong I, Units 4, 5, 6 (Tien Lang) | 2,250.0 | MW | Vietnam | Unclear - signed MoU with sponsor |
| 5 | JERA | LNG Power Plant | Matarbari Summit LNG Power Plant | 2,400.0 | MW | Bangladesh | 22% Shareholder of Summit, one of the JV owners of the plant |
| 6 | JERA | Terminal | Ca Na LNG Terminal | 97,000.0 | tonnes | Vietnam | Sponsor (Prospective) |
| 7 | JERA | Terminal | Matarbari LNG Terminal | 7.5 | mtpa | Bangladesh | Bidder |
| 8 | JERA | Terminal | Matarbari Summit LNG Terminals | 1,500.0 | mmscf/d | Bangladesh | 22% Shareholder of Summit, one of the JV owners of the project |
| 9 | JERA | Terminal | Tien Lang 1 Industrial Park Hai Phong Terminal | 6.0 | mtpa | Vietnam | Unclear - signed MoU with sponsor |
| 11 | Mitsubishi Corporation | LNG Power Plant | LNG Long Son I | 1,500.0 | MW | Vietnam | Sponsor |
| 13 | Mitsubishi Corporation | Terminal | Matarbari LNG Terminal | 7.5 | mtpa | Bangladesh | Bidder |
| 14 | Mitsubishi Corporation | Terminal | Matarbari Summit LNG Terminals | 1,000.0 | mmscf/d | Bangladesh | Sponsor |
| 15 | SMBC Group | LNG Power Plant | Nhon Trach 3&4 | 1,500.0 | MW | Vietnam | Lender |
| 16 | SMBC Group | LNG Power Plant | Pertamina LNG Power Plant | 1,400.0 | MW | Bangladesh | Adviser |
| 17 | SMBC Group | LNG Power Plant | Quang Ninh I (Cam Pha) | 1,500.0 | MW | Vietnam | Lender (Prospective) |
This buildout spells disaster for communities and climate
The lifecycle emissions from 15 proposed LNG power projects’ operating lifetime with all Japanese companies’ involvement (33.2 GW) is estimated to be 2.14 billion tonnes of CO2-e. This figure does not include projects where Japanese companies are involved at the environmental impact assessment and feasibility study stage.
This is more than three times the equivalent of Japan’s 2030 absolute emission reduction target under its nationally determined contributions (NDCs) towards achieving the goals of the Paris Agreement more than three times over [1].
JERA, Mitsubishi Corporation, SMBC Group and other companies need to live up to their commitments to net zero emissions by 2050, withdraw from these projects and ensure the communities in these countries get the same opportunity as wealthy countries to develop with clean and cheap renewable energy.
Local community members repairing their boats on the empty swathes of land set aside for Japan-backed LNG to power project proposed to be built in Matarbari, Bangladesh.
Photo credit: Market Forces
Methodology
This analysis examined the LNG projects (LNG to power, terminals and Floating Storage Regasification Units (FSRUs)) proposed to be built in Bangladesh, Thailand and Vietnam as of July 2022.
Market Forces identified proposed projects that have not reached financial close or have material prospects of being commissioned. Project data, including details on companies involved and potential financiers was compiled using Bangladesh Power Division’s Revisiting Power System Master Plan (PSMP) released in 2018, Vietnam’s PDP7 revised and draft PDP8, Thailand’s PDP 2018 Rev, official government documents, publicly available resources, company websites, peer-reviewed academic journals, news and research reports and subscription based financial databases IJGlobal and Thomson Reuters Refinitiv.
The projects list compiled by Market Forces is not an exhaustive list of all domestic gas and imported LNG projects. Projects powered by domestic gas sources are excluded. Market Forces has made every effort to ensure the analysis and information provided in the analysis are sound, but cannot guarantee the accuracy or correctness of any of the data collected from external sources.
Emissions Calculation
The proposed LNG projects are assumed to have a 50% average capacity factor across a 30-year economic lifetime. Emissions estimates are based on median lifecycle emissions from combined cycle gas power of 490 gCO2eq/kWh, according to IPCC 2014, p1335, citing Schlömer S., T. Bruckner, L. Fulton, E. Hertwich, A. McKinnon, D. Perczyk, J. Roy, R. Schaeffer, R. Sims, P. Smith, and R. Wiser. (2014). Annex III: Technology-specific cost and performance parameters. In: Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Edenhofer, O., R. Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlömer, C. von Stechow, T. Zwickel and J.C. Minx (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.
https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf#page=7
Japan’s Updated First Nationally Determined Contributions (NDCs) (Accessed 25 March 2022). Climate Watch Data.
https://www.climatewatchdata.org/ndcs/country/JPN/mitigation?document=revised_first_ndc§ion=ghg_target
References
[1] Japan NDC absolute emission reduction target is -620 MtCO2-e compared to 2013 baseline. Source: Climate Watch