Japan, India plan talks on oil field, coal investment

Japan, India plan talks on oil field, coal investment
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First Published: Thu, Mar 08 2007. 02 45 PM IST
Updated: Thu, Mar 08 2007. 02 45 PM IST
Shigeru Sato and Yuji Okada, Bloomberg
Tokyo/New Delhi: Japan and India, the world’s fourth- and fifth-biggest energy users, plan talks that may lead to joint investment in oil and gas projects, as well as sales of coal-fired and nuclear power plant technology.
Japan’s Trade Minister Akira Amari and Montek Singh Ahluwalia, deputy chairman of India’s planning commission, may meet in April, said three government officials helping arrange the talks. They declined to be named before details are fixed.
India wants Japanese investment to build energy-efficient power plants to keep pace with electricity needs and 9% annual economic growth. Closer ties may provide opportunities in the South Asian nation’s market to companies such as Kobe Steel Ltd that’s developed clean coal-burning technology, and Toshiba Corp. for nuclear power reactors.
“We’re keen to enter into India, China, and Vietnam, all of which plan to build more nuclear power plants,” said Hiroko Mochida, a spokeswoman for Toshiba, which acquired control of Westinghouse Electric Co. in October last year. Japan and India need to set up a legal framework to allow Toshiba to enter India’s nuclear power market, Mochida said. “We’re waiting for the treaty to be inked,” she said.
Toshiba said in October it projects its revenue from the nuclear plant business to grow to 900 billion yen (Rs34,212 crore) by 2020 from 200 billion.
Japan and India are expected to discuss tie-ups in five areas: electricity, energy conservation, oil and gas exploration and production, coal, and renewable fuels, such as solar power, the officials said.
Missing Target
India needs more power plants as the country will probably miss a government-set target to expand electricity production capacity during a five-year development plan ending 31 March.
Expansion fell 37% short of the target of 36,956 megawatts, the government said on 27 February. Non-state companies will add 1,931 megawatts of new capacity compared with a target of 4,899.
India, holding 10% of the world’s coal mines, wants to build more coal-fired thermal power plants that emit less pollution, the government officials said.
Japan’s government has promoted technologies in China, Indonesia, Vietnam and Thailand that burn coal at power plants that produce less pollution, according to a report by the trade ministry.
“With its big appetite for energy, India is the country Japan should be watching closely,” said Toshinori Ito, senior energy analyst at UBS Securities Japan Ltd. “There is a slew of business opportunities there in energy-saving and clean energy technologies.”
In Indonesia, Japan’s state-controlled New Energy and Industrial Technology Development Organization, or NEDO, is leading a project to liquefy coal for processing into gasoline and diesel oil with Kobe Steel Ltd.
Kobe Coal
Kobe Steel has developed coal liquefaction technology and a technique to process low-quality coal with high water content into high-quality fuel that can be burned at a thermal power plant, said spokesman Kenji Hamada.
On Indonesia’s Kalimantan island, Kobe Steel plans next month to start building a $69 million test-plant to improve the coal’s quality by deep-frying it with asphalt, Hamada said. The technology will allow the Southeast Asian nation to boost exports of upgraded coal as demand increases for power generation amid soaring crude oil prices.
Closer energy ties with India will offer other channels for Kobe’s technology, while joint oil and gas exploration will assist both countries as competition heats up to secure natural resources.
Japan’s government wants companies such as Inpex Holdings Inc., the country’s biggest oil explorer, to help boost the country’s overseas oil assets to 40% of its imports by 2030 from 15%, according to the country’s energy policy.
Inpex needs others projects after last year giving up a controlling stake in Iran’s Azadegan oil field, Iran’s largest discovery in 30 years, after the country refused to halt developing its nuclear program in defiance of the United Nations.
India and Japan face increasing competition from China to secure future global oil supplies. India imports about 75% of its oil needs, while Japan depends on imports for almost 99 percent of the oil it consumes.
China committed more than $8 billion last year to Nigeria, Angola and Mozambique, according to World Bank figures, to secure access to oil, copper and other resources it needs to fuel its economy, which expanded 10.7% in 2006.
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First Published: Thu, Mar 08 2007. 02 45 PM IST
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