A group of Japanese firms, including some of the largest buyers of LNG, agreed to study the production and export of hydrogen blended with carbon dioxide (CO2) in Texas and Louisiana.


Mitsubishi Corp., Osaka Gas Co. Ltd., Toho Gas Co. Ltd. and Tokyo Gas Co. Ltd. have disclosed an agreement to explore a U.S.-based supply chain of synthetic methane, referred to as syngas or e-methane. The firms have outlined plans to test whether blending hydrogen made with renewable electricity, referred to as green hydrogen, with CO2 captured from industrial processes could create a cheaper way to export low-carbon fuel to Japan.

The firms are studying Texas and Louisiana with an eye toward Sempra Infrastructure’s Cameron liquefied natural gas facility as a possible starting point to export syngas. Mitsubishi owns equity in Cameron and a proposed expansion at the facility with joint venture partner Nippon Yusen Kabushiki Kaisha.

“This decision was made in light of accessibility to the infrastructure for feedstock procurement and high possibility of achieving early establishment of the supply chain,” representatives for the partnership said. “The four companies will continue to conduct feasibility studies on other promising locations to expand its syngas procurement capabilities for enhanced energy security of Japan.”

The study is estimated to continue until the end of 2023 with a final investment decision by  2025. The companies estimate that first production of methane could be achieved as soon as 2029, with an initial target of 130,000 tons/year. The first cargo could be exported to Japan by 2030, according to the timeline.

Surveys are planned of potential project sites and sources for renewable energy, water, hydrogen and CO2, before starting regulatory and partnership discussions, according to the companies.

However, the companies noted that the eventual wide use of e-methane will require “certificates of origin to differentiate e-methane from natural gas, internationally-recognized accounting rules of carbon emissions from e-methane combustion and economic incentives for production and utilization of e-methane. 

“The four companies plan to cooperate with stakeholders in the U.S. and Japan to promote the creation of necessary rules and systems in line with the project schedule,” representatives for the companies wrote.

A unit of Mitsubishi also disclosed an agreement with ExxonMobil to explore carbon capture and storage (CCS) projects to serve large industrial customers. Mitsubishi Heavy Industries Ltd. has completed work on 14 CCS projects worldwide.

Japan, which has been in a back-and-forth with China for the position of top LNG importer, has been adapting to a spike in global commodity prices and greater competition in the spot LNG market. Japan has been working with allies in the U.S. to develop future supply agreements and revived investment in nuclear generation earlier in the year.