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Tokyo Gas and Santos Collaborate to Produce Carbon-Neutral E-Methane for Japan

Japanese utility Tokyo Gas and Santos plan to create carbon-neutral e-methane in Australia, exporting 60,000 metric tonnes to Japan by 2030
t 9531.TSE Mid and Small Cap 2000
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Tokyo Gas and Australian energy company Santos have joined forces to develop a strategy for producing carbon-neutral synthetic methane, commonly known as e-methane, in Australia. On Tuesday, the companies announced the signing of a memorandum of understanding to assess the feasibility of the project. The proposed location for a new production plant is the Cooper Basin, situated in the mid-eastern region of the Pacific nation.

The initial target is to manufacture approximately 60,000 metric tonnes of e-methane by 2030, constituting 1% of Tokyo Gas’s total gas sales. Further project expansion is under consideration should the initiative proceed.

Japan aims to leverage methane to mitigate carbon emissions from gas consumption, given its compatibility with existing infrastructure. In contrast to hydrogen, which necessitates substantial investments in transport and storage infrastructure, methane offers logistical advantages.

E-methane, derived from green hydrogen and CO2, is the focal point of Tokyo Gas and Santos’ collaboration. The partners will assess green hydrogen production methods and profitability before committing to the project.

As part of Japan’s broader vision to replace 90% of city gas supply with e-methane by 2050, Tokyo Gas and other major utilities target a 1% replacement of city gas sales with e-methane by 2030. This partnership with Santos marks Tokyo Gas’s fifth such project, aligning with its global pursuit of sustainable energy solutions.

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