Marubeni Signs a Water and Energy Conversion Agreement for the Tanajib Cogeneration and Desalination Project in the Kingdom of Saudi Arabia

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Marubeni Corporation (hereinafter, “Marubeni”) hereby announces that, together with Abu Dhabi National Energy Company PJSC (hereinafter, “TAQA”), Marubeni has signed a Water and Energy Conversion Agreement to develop a greenfield industrial steam, water and electric cogeneration plant and seawater desalination plant, as well as pipelines between the cogeneration plant and the desalination plant, and also the desalination plant and facilities of Saudi Arabian Oil Company (hereinafter, “Aramco”) on September 15, 2021.

The plants will be located in Tanajib, in the Eastern Province of Saudi Arabia, on land procured by Aramco, and this project will supply electricity, steam, and desalinated water to the new oil and gas facilities in the area owned by Aramco. Under the contract, Marubeni and TAQA will operate the plants for 20 years on a build, own, operate, and transfer basis.

Marubeni, TAQA, and Aramco have established a special-purpose company in Saudi Arabia and will develop the cogeneration plant and the seawater desalination plant with a net capacity of approximately 940MW of electricity generation, a steam output of approximately 1,084 tons per hour, and a desalinated water output of approximately 19,470 cubic meters per day. The cogeneration plant consisting of gas turbines, heat recovery steam generators, and steam turbines can efficiently generate electricity with the waste heat used to generate process steam and achieve high thermal efficiency, which contributes to carbon emissions reduction by reducing natural gas consumption.

This will mark Marubeni’s 4th power and water project in Saudi Arabia, adding to the existing Third Party Cogeneration Projects (900MW of power, 1,500ton/h of steam) (*1); the Shuqaiq 3 Independent Water Project (450,000m³/day of water)(*2); and the Rabigh Solar PV IPP Project (300MW of power)(*3).

Marubeni owns stakes in power projects across 19 countries (including Japan) for a total net capacity of about 12GW. Also, Marubeni will continue to deploy its expertise and experience in the power generation business, and at the same time contribute to the establishment of a sustainable society by providing reliable sources of power that are also environmentally friendly.

Source: Marubeni

Petropipe

Japan wins deal for nearly $2bn LNG power plant in Myanmar

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Trading houses Marubeni, Sumitomo Corp. and Mitsui & Co. will build a liquefied natural gas-fired power plant in Myanmar, one of the biggest investments by Japanese companies in the Southeast Asian country, people familiar with the matter say.

The three companiesestimate total investment in the project at $1.5 billion to $2 billion.The plant is expected to start operating by 2025 with a capacity equalto about 20% of Myanmar’s existing power plants.

The project marks a win for Japan in a region where China has competed hard for infrastructure deals.

Demand for LNG power is expected to grow in Southeast Asia as a low-emission alternative to cheap coal. Marubeni, Sumitomo and Mitsui expect the project in Myanmar to help them expand their power businesses in the region.

In Myanmar, electricity demand has been growing at a rate of 10% to20% a year with industrialization and the electrification of farmingvillages. Frequent power outages have posed an obstacle to the country’sgoal of attracting foreign investment in manufacturing.

The plantwill be built in a suburb of Yangon, Myanmar’s commercial capital andmost populous city. The three companies will operate it through a jointventure they will establish with Eden Group, a local conglomerate whosebusinesses include real estate and agriculture.

The plant will have a generating capacity of 1,250 megawatts — about as much as one nuclear reactor. Myanmar’s existing power generation capacity is about 6 megawatts, according to the country’s Ministry of Electricity and Energy.

The Myanmar government will soon provide the project partners awritten notification that gives a green light to proceed to the nextstage, which includes a detailed feasibility study, plant design andnegotiations on selling power to the Electric Power GenerationEnterprise, a public utility.

With its access to the Indian Ocean,Myanmar is a key focus of China’s Belt and Road infrastructureinitiative. Chinese President Xi Jinping called on Myanmar’s governmentto smooth the way for infrastructure projects during a visit to thecountry in January. In 2018, Chinese companies secured the rights to anLNG power plant project of a similar scale to that planned by theJapanese trading houses.

The new investment in LNG power comes asSoutheast Asian nations grapple with the environmental costs of coal,which provides about 40% of the region’s electric power. The fuel’s highcarbon dioxide emissions have raised opposition to new coal plantsamong both local residents and the international community.

LNGemits about half as much CO2 as coal when burned. Myanmar recently begancommercial operations at an LNG power plant run by a Hong Kong-ledgroup. In Vietnam, the state-run PetroVietnam group has started buildingthe country’s first LNG terminal, which is expected to becomeoperational in 2022. The Philippines also has plans for an LNG terminal.

Japan has faced criticism for its funding of overseas coal projects, prompting major trading houses to halt participation in new power plant and mine deals.

Source: Asia Nikkei