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, almost 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 2 proposed LNG power projects totalling 4,700 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
5 2 Mitsubishi Corporation 2 4,700
2 3 Sumitomo Corporation 2 6,200
3 4 JBIC 3 6,150
4 5 ENEOS (formerly JXTG) 1 6,000
6 6 Tokyo Gas 2 4,700
7 7 SMBC Group 3 4,400
8 8 Mitsui & Co 2 3,830
10 9 Kyushu Electric 3 3,100
10 10 Sojitz 3 3,100
9 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 Bac Lieu (I, II, II + IV) 3200 MW Vietnam LNG Supply Bidder
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
10 Mitsubishi Corporation LNG Power Plant Bac Lieu (I, II, II + IV) 3,200.0 MW Vietnam LNG Supply Bidder
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 [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

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&section=ghg_target

References

[1] Japan NDC absolute emission reduction target is -620 MtCO2-e compared to 2013 baseline. Source: Climate Watch