Major Japanese oil firm buys into government-backed joint venture shipping liquid hydrogen from Australia to Japan

Inpex, Japan's largest company engaged in oil and gas exploration and production, has made an announcement regarding its acquisition of a 30% stake from Kawasaki Heavy Industries in Japan Suiso Energy (JSE), a joint venture responsible for a contentious project aiming to transport liquid hydrogen from Australia to Japan. Initially, Kawasaki held a 66.6% ownership in JSE, and now they retain a 36.6% share, while the remaining 33.4% of the joint venture remains under the control of industrial gases company Iwatani.

Liquid hydrogen as a means of hydrogen transportation has faced skepticism due to the significant costs associated with liquefaction and its relatively low energy density by volume compared to other carriers such as ammonia and liquid organic hydrogen carriers (LOHCs). The challenges became evident during the maiden voyage of Suiso Frontier, the first liquid hydrogen carrier constructed by Kawasaki as part of a publicly funded JSE-led demonstration project. During the voyage between Australia and Japan last year, the vessel encountered issues, including the emergence of a one-meter-long flame on the deck while attempting to burn "boil-off" gas. This gas consists of hydrogen at the edges of the storage tank that transitioned from a liquid to a gas due to warming by the ambient air when its temperature rose above minus 253°C.

Proponents of liquid hydrogen have emphasized the substantial energy consumption involved in converting ammonia back into hydrogen. Inpex believes that its extensive 30-year experience in the liquefied natural gas (LNG) sector will be instrumental in commercializing JSE, which has primarily taken the lead in Japanese government-supported pilot initiatives until now.

JSE currently spearheads the Hydrogen Energy Supply Chain (HESC) project, which aims to produce 30,000 tonnes of "blue" hydrogen in Australia through coal gasification with CO2 capture and underground storage before shipping it as a liquid to Japan. The Japanese government had already allocated ¥220 billion ($1.45 billion) for JSE's undertaking. Additionally, Japan's research and development agency Nedo has supported Japanese oil company Eneos in exploring methylcyclohexane, a type of LOHC, as a potential carrier for hydrogen imports. Nedo's support for JSE and Eneos is scheduled to conclude in 2030, although the consortium behind HESC, including J-Power, Sumitomo, and JSE, has previously suggested the project's potential commercialization in the 2030s.