Eneos Japan to increase investment in LNG and SAF, but slow down hydrogen

Eneos Holdings' CEO announced on Monday that the company plans to invest more in low-carbon fuels such as liquefied gas and sustainable aviation gasoline, but will slow down efforts for cleaner alternatives, like hydrogen.

Eneos has announced a new business plan that will run through March 2028. The plan includes a 1.56 trillion-yen investment, including 740-billion-yen of strategic expenditures aimed at low-carbon, decarbonised and renewable energy sources, as well as carbon capture and storage.

Tomohide Miyata, CEO of Tomohide Miyata Corporation, said at a press conference that the company plans to expand and strengthen its LNG operations. The demand for LNG is expected to increase through 2040.

The company will spend 310 billion yen on low-carbon energy and 250 billion in decarbonised power, plus 180 billion in oil and chemicals. This is in addition to 820 billion for the maintenance of its refinery core operations.

Miyata said that Eneos could also use up to 1 trillion yen of its management reserves, which includes LNG, for strategic investments.

Eneos, like its global peers is shifting its portfolio of business to align with energy transition.

Miyata added that the company was not in a rush to provide hydrogen and ammonia.

Eneos's previous target to supply up to 4,000,000 metric tons by fiscal year 2040 has been removed from the new plan.

Miyata stated that stable and affordable energy sources, such as oil, have become more critical due to rising concerns about energy security, U.S. policies, and the increasing cost of decarbonisation technology.

Eneos has stakes in LNG projects across Asia. However, Miyata stated that U.S. projects such as Alaska LNG could be considered, if they are economically viable.

The refiner forecasted a drop of 18% in the net profit for this year.

The refinery aims to increase its run rate (excluding scheduled maintenance) to 90% by fiscal year 2027 from 78% during 2024.

(source: Reuters)