Japan's Eneos to ramp up investment in LNG, SAF while slowing hydrogen
Japan's top oil refiner, Eneos Holdings, plans to increase investment in low-carbon energy such as liquefied natural gas (LNG) and sustainable aviation fuel (SAF), while slowing efforts in cleaner alternatives like hydrogen, its CEO said on Monday.
Under a new three-year business plan through March 2028, Eneos will invest 1.56 T yen ($10.7 B), including 740 B yen in strategic spending focused on low-carbon and decarbonized energy, such as renewables and carbon capture.
"We plan to reinforce and expand our LNG operations as demand is expected to grow through around 2040," CEO Tomohide Miyata told a news conference.
Spending over the period includes 310 B yen in low-carbon energy, 250 B yen in decarbonized energy, and 180 B yen in oil and chemicals, on top of 820 B yen to maintain its core refinery operations.
Eneos may also tap up to 1 T yen in management reserves for strategic investments, including in LNG, Miyata added.
Like its global peers, Eneos is shifting its business portfolio to align with the energy transition.
"But the trend toward a carbon-neutral society is slowing, and the full-scale bifurcation of the energy transition, previously expected around 2030, may be delayed," Miyata said, adding the company is in no rush to supply hydrogen and ammonia.
In the new plan, Eneos has removed its previous target of supplying up to 4 MM tonnes of hydrogen by the fiscal 2040 year.
Instead, stable and affordable energy, including oil, has become more important amid rising energy security concerns, U.S. policy risks, and the growing cost of decarbonization technologies, Miyata said.
Eneos already holds stake in LNG projects in Asia, but Miyata said U.S. projects, including Alaska LNG, could be considered if economically viable.
The refiner reported a 22% decline in net profit for the year ended March 31 and forecast an 18% drop for the current year.
It aims to raise its refinery run rate, excluding scheduled maintenance, to 90% by fiscal 2027, up from 78% in 2024.
($1 = 145.9800 yen)
(Reporting by Yuka Obayashi; Editing by Sharon Singleton)
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