Osaka Gas partners with Santos to produce e-methane in Australia

Japan’s Osaka Gas has teamed up with Australian oil company Santos to produce e-methane from green hydrogen in Australia for export to Japan and other markets from 2030.

PHOTO: Outline of Osaka Gas and Santos’ planned e-methane facility. Osaka Gas

Osaka Gas and Santos intend to produce e-methane from green hydrogen and CO2 at a new methanation plant. The green hydrogen will be generated from electrolysis of water with renewable energy as a power source. The CO2 will be captured from industrial sites and natural gas production sites. The produced e-methane will be liquefied by Santos or at third-party facilities, before being shipped to Japan.

Once operational, the new methanation plant is projected to have capacity to produce 10,000 cbm/hour of e-methane, for export of around 60,000 mt/year.

The companies conducted a feasibility study for the project in 2022. From next month they will embark on further studies into how renewable power and CO2 can be procured and where in Australia the methanation plant will be located. They will then enter into a basic designing phase in 2024. A final investment decision is expected in 2026, and production expected from 2030.

They will draw on Santos’ existing infrastructure for the project and consider capturing CO2 directly from the atmosphere in the project's later phases.

“The advantage of e-methane is that it overcomes the challenges associated with the transport and export of hydrogen by allowing the use of existing transport, liquefaction and end user infrastructure providing a scope 1 and 2 as well as a scope 3 carbon neutral outcome,” said Santos’ managing director and chief executive Kevin Gallagher.

By Tuhin Roy

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