Commencement of Pre-FEED for E-methane Production and Supply Project in Peru

Marubeni Corporation (referred to as "Marubeni" hereinafter), in collaboration with PERU LNG S.R.L. (referred to as "PERU LNG"), a liquefied natural gas enterprise in which Marubeni is a participant, and Osaka Gas Co. (referred to as "Osaka Gas"), has entered into a collaborative research agreement to initiate an Initial Front-End Engineering and Design exploration (referred to as "Pre-FEED") for a project dedicated to manufacturing e-methane* using green hydrogen** and carbon dioxide (CO2) in Peru (referred to as the "Methanation Project").

E-methane, having an identical composition to natural gas (also denoted as "city gas" in Japan), boasts the advantage of being compatible with pre-existing infrastructure and facilities like natural gas pipelines. Consequently, it displays substantial potential as a cornerstone for the realization of gas decarbonization. The 6th Strategic Energy Plan, disclosed by the Japanese government in October 2021, establishes objectives for incorporating e-methane into current infrastructure (1% by 2030 and 90% by 2050) to accelerate the transition to environmentally neutral gas.

Since July 2022, Marubeni, PERU LNG, and Osaka Gas have been actively conducting an initial investigation for this project. This preliminary study examined the feasibility of obtaining renewable energy and necessary CO2 to generate approximately 60,000 tons of e-methane annually. The outcome confirmed the viability of utilizing Peru's abundant renewable energy sources, including solar, wind, and hydropower, alongside the considerable CO2 capacity of the PERU LNG liquefaction terminal, to produce around 60,000 tons of e-methane annually at a competitive cost.

The Pre-FEED phase will encompass deliberations regarding the requisites for sourcing renewable energy and raw materials, including CO2. It will also entail detailed assessments of plant construction specifications, economic appraisals, and other facets of feasibility. Following the Pre-FEED phase, Marubeni, Osaka Gas, and PERU LNG will evaluate the findings and determine the potential for investment by 2025. The overarching objective is to initiate the production and distribution of e-methane by 2030.

*E-methane: Methane derived from non-fossil fuel sources such as green hydrogen.

** Green hydrogen: Hydrogen generated through electrolysis utilizing renewable energy-generated electricity. This process involves the separation of hydrogen and oxygen from water.