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

Aug. 22, 2023
Marubeni Corporation

Marubeni Corporation (hereinafter, “Marubeni”), together with PERU LNG S.R.L. (hereinafter, “PERU LNG”), a liquefied natural gas company in which Marubeni participates, and Osaka Gas Co. (hereinafter, “Osaka Gas”) have signed a joint study agreement to commence a  Preliminary-Front End Engineering and Design study (hereinafter, “Pre-FEED”) for a project to produce e-methane*1 from green hydrogen*2 and carbon dioxide (CO2) in Peru (hereinafter, the “Methanation Project”).

Project site (PERU LNG liquefaction terminal) Project site (PERU LNG liquefaction terminal)

As e-methane has the same composition as natural gas (also referred to as “city gas” in Japan), it can utilize existing infrastructure and facilities such as natural gas pipelines, and thus has great potential as a pillar for the realization of gas decarbonization. The 6th Strategic Energy Plan announced by the Japanese government in October 2021 sets targets for e-methane uptake into existing infrastructure (1% by 2030 and 90% by 2050) to promote the transition to carbon neutral gas.

Marubeni, PERU LNG, and Osaka Gas have been conducting an initial study for the project since July 2022. The initial study investigated the potential for procuring renewable energy and CO2 required to produce approximately 60,000 tons of e-methane per year. As a result, it was confirmed that Peru’s abundant renewable energy sources, mainly solar, wind, and hydropower, and the project site PERU LNG liquefaction terminal’s capacity of sufficient amounts of CO2 to produce approximately 60,000 tons of e-methane per year, could allow the project to produce e-methane at a competitive price.
The Pre-FEED will involve discussions on the conditions for procuring renewable energy and raw materials, including CO2; specification studies for plant construction; and economic evaluations and other detailed feasibility studies. After completion of Pre-FEED, Marubeni, Osaka Gas and Peru LNG will assess the results and evaluate if an investment decision could be made by 2025, with the aim of starting production and sales of e-methane by 2030. 

Marubeni aims to make both medium- and long-term contributions to global climate change action in accordance with the Marubeni Long-Term Vision on Climate Change formulated in March 2021 and the Green Strategy in the Mid-Term Management Strategy “GC2024,” formulated in February 2022.

*1 E-methane: Methane produced from non-fossil energy sources such as green hydrogen.
*2 Green hydrogen: Hydrogen produced through an electrolysis process using electricity generated from renewable energy, involving the extraction of hydrogen from water which has been split into hydrogen and oxygen.

Related Release
Jul. 14, 2022
Marubeni Signs Joint Study Agreement for Methanation Project in Peru

About Osaka Gas
Name: Osaka Gas Co., Ltd
Head Office: 4-1-2 Hiranomachi, Chuo-ku, Osaka 541-0046, Japan
Established: April 10, 1897
President: Masataka Fujiwara
Main Business: Production, supply, and sales of city gas (natural gas), power generation, sale of electricity, etc.
Website: https://www.osakagas.co.jp/
Head Office: Calle Las Palmeras 435, Edificio PAL 400, Oficina 302, San Isidro, Lima, Peru
Established: March 24, 2003
General Manager: Maria Julia Aybar
Main Business: Production, supply, and sales of LNG
Website: https://perulng.com/en/