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Sembcorp enters into MOU to supply Japan with green ammonia produced in India

Felicia Tan
·1-min read

Shares in Sembcorp closed 10 cents lower or 1.94% down at $5.06 on Dec 18.

Sembcorp Industries’ wholly-owned subsidiary, Sembcorp Green Hydrogen Pte Ltd, has entered into a memorandum of understanding (MOU) with Sojitz Corporation (Sojitz) and Kyushu Electric Power Co., Inc. (Kyushu Electric). Sojitz is a Japanese conglomerate with energy trading and investment businesses, while Kyushu Electric is a major Japanese energy company that provides power mainly in Japan’s Kyushu region.

The MOU was for both parties to pursue potential opportunities to export green ammonia produced in India to Japan. It was presented at the Asia Zero Emission Community Leaders’ Meeting held on Dec 16, hosted by Japan’s Ministry of Economy, Trade and Industry.

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According to Sembcorp, the partnership will support the Japanese government’s goal to achieve net zero emissions by 2050. Japan is aiming to import 3 million tonnes of ammonia for fuel by 2030, with demand expected to grow to 30 million tonnes by 2050. Green ammonia is seen as a critical energy source to decarbonise Japan’s power supply mix.

The MOU is subject to a final investment decision and the consortium finalising supply arrangements. Once that’s finalised, the parties will pursue the construction of green ammonia facilities in India, with Sembcorp as lead developer. Sojitz and Kyushu Electric will leverage their energy trading and supply capabilities to oversee the transport of the green ammonia to Japan and secure offtakers in Japan.

The MOU will not have a material impact on Sembcorp’s earnings per share (EPS) and net tangible assets (NTA) per share for the FY2023 ending Dec 31.

Shares in Sembcorp closed 10 cents lower or 1.94% down at $5.06 on Dec 18.

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