Discussing the latest developments in the global gas markets, Mr Kazuhisa Yano outlines the potential of LNG in the growing shift towards a low carbon economy and its prospects as a bunkering fuel in the shipping sector. He also sheds light on the recent sustainability initiatives spearheaded by Osaka Gas.
1. The Osaka Gas group brand, Daigas Group, was launched in 2018 as an expression of the firm’s commitment to being an innovative energy and service company for its customers. Please share some of the company’s achievements and milestones over the past two years.
Over the past two years, we have expanded our energy business focusing on Southeast Asia as well as in Japan and North America. One of our key developments is in the field of renewables, such as:
- Wind power generation: A 25MW onshore wind power plant under construction (scheduled to be launched in 2021) and a 600GW offshore power plant in the pipeline, both are located in Japan, where we currently have 140GW generation capacity in total.
- Biomass power generation: A 75GW biomass power plant to be constructed, which will be of the largest scale in Japan.
- Solar power generation: An investment in SolAmerica Energy, LLC, a U.S. distributed solar energy project developer, and the establishment of OE Solar Co., Ltd., a solar power supply business in Thailand.
Through energy development, we intend to continue providing value to customers and creating a “new normal” as a corporate group that can achieve sustainable growth by taking on challenges and going beyond business boundaries and customer expectations under the Long-term Management Vision 2030 “Going Forward, Beyond Borders” we announced in 2017.
2. How do you foresee Asia’s gas market evolving over the next five years in a post-pandemic economy?
As for the outlook of Asia’s gas market in a post-pandemic economy, we need to discuss it from the perspectives of the energy demand as well as the supply.
In light of energy demand in Asia, natural gas will be a realistic solution. As Asia’s population continues growing and standards of living improve despite the temporarily sluggish economy in the wake of the pandemic, Asia will need to meet its increasing energy demand while reducing CO2 emissions. With renewables hardly achieving this task by itself yet, natural gas can address those issues in an economically reasonable way and continue to expand its market in Asia. And its demand growth will be seen in multiple sectors including the industrial, commercial, and residential sectors to meet their large heating demand as well as in the power sector as a generation fuel with less CO2 emissions. Even in the transportation sector, an oil-based fuel dominant industry, natural gas is likely to increase its share as a cleaner fuel in the coming years.
In energy supply, LNG will continue playing an important role as a fuel that is cleaner than other fossil fuels for the base load electricity. While the shift toward low carbon economy is accelerating the world over, LNG/natural gas fired power generation can significantly contribute to the rapid economic growth of Southeast Asian countries, which are planning a number of such projects. As another potential development in energy supply, an international gas trading hub might be established in key locations such as Singapore, in which many important players are base d for their LNG trading business.
3. With energy demand projected to grow, especially in Southeast Asia, what are some of the emerging opportunities that Osaka Gas sees in the region?
We see emerging opportunities in Southeast Asia in the following three fields:
- Smart City: In Southeast Asia, countries are planning new city development and large-scale redevelopment of existing cities, which requires a new city system that can maintain proper balance between energy consumption and environment conservation. One of the possible solutions would be smart city developments. We are capable of contributing to these developments by providing value to the projects based on our renewable energy technologies, combined with our know-how of advanced utilisation of natural gas, which we gained through many energy projects including District Heating and Cooling (DHC) we pioneered in Japan.
- Bio gas: We see market potential in Indonesia and Thailand, where we can apply the technologies we use for a bio gas business targeted at NGVs (Natural Gas Vehicles) in Thailand. In this business, we produce Compressed Bio Gas (CBG) from palm oil mill effluent, which is refined using our proprietary technologies. Our long accumulated know-how would contribute to the development of bio gas business in Southeast Asia.
- Wind power generation: We are exploring opportunities to develop wind power business in Southeast Asia by utilising our expertise of onshore and offshore wind power generation we gained through our projects in Japan.
Other possibilities include LNG terminals and related business such as the Internet of Things (IoT), fossil fuel power plants, and other renewables including solar power.
4. What are your views on the evolving role of LNG as a transition fuel?
As the energy landscape continues shifting from fossil fuel to renewables, LNG will increase its importance as a transition fuel. While this shift toward decarbonisation is progressing based on the balance between demand and supply, LNG plays a key role not only in promoting the shift but also in supporting the economic growth during the shift. In fact, as emerging Asian economies continue to grow, an increasing amount of LNG has been widely used and traded in the region.
LNG is also becoming an essential bunkering fuel, replacing heavy oil in the gradual shift of marine fuel to new energy sources such as ammonia, hydrogen, and batteries. As a transition fuel in this shift, LNG bunkering will establish a significant position in the transportation industry.
Aiming to meet the growing LNG demand in Southeast Asia, the Daigas Group intends to contribute to the expansion of LNG business in the region through Osaka Gas Energy Supply and Trading (OGEST), the Group’s trading arm that started commercial operation in Singapore this April.
5. The theme for SIEW 2020 is Creating a Low Carbon Energy Future Together. How does the theme relate to Osaka Gas’ sustainability initiatives?
Creating a low carbon energy future is one of our goals we strive to achieve through technological innovation for hydrogen utilisation and methanation that can promote “carbon neutral gas.”
In the utilisation of hydrogen, we aim to realise its efficient and economical commercial application. To that end, we pursue innovation while applying our existing technologies such as hydrogen generators and fuel processing system for ENE-FARM, a residential fuel cell unit.
In the meantime, we are working on methanation technology, which produces methane without emitting CO2 through refining process using renewable energy. This technology will make it possible to supply the carbon neutral gas through the existing gas infrastructure from LNG vessels to gas appliances, leading to the realization of a decarbonised society.
We would like to contribute to developments in Southeast Asia with these technologies, positioning Osaka Gas as an innovative energy and service company that continues to be the first choice for customers.
About Kazuhisa Yano, Chief Asia Representative, Osaka Gas
Mr. Kazuhisa Yano is Executive Chairman of Osaka Gas Singapore Pte. Ltd., an affiliate of the Daigas Group, a leading Japanese corporate group energy businesses. He assumed his current responsibilities on 1 April, 2018.
Prior to the present position, Yano experienced his senior executive assignments at Osaka Gas Co., Ltd. as Heads of the Commercial & Industrial Energy Business Unit (April 2016 – March 2018) and the Energy Resources & International Business Unit (April 2014 – March 2016).
Yano experienced other executive positions in the fields of corporate communications, commercial and industrial energy marketing, and regional networking, between June 2007 and March 2014.
In the fields of international energy business, Yano in his previous responsibilities worked as manager for business planning and development as well as for asset management both within Osaka Gas and its power business subsidiary, Gas & Power Investment, between 2000 and 2007.
After joining the company in 1981, Yano was assigned in marketing divisions for almost 20 years, covering activities ranging from residential to commercial and industrial business planning and sales.
Yano was educated at Kobe University where he earned a bachelor’s degree in business administration. He also did academic work at University of Reading in UK as a graduate student (MSc in Urban Land Appraisal) and as a fellow at the Kennedy School of Government of Harvard University.
Yano was born in November 1958.