Japan strengthens energy ties to Saudi Arabia, Oman | CPT PPP Coverage

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Yasutoshi Nishimura, Japan’s economy, trade and industry minister, visited the Gulf this week to finalize several energy agreements with Saudi Arabia and Oman. 

What happened: Oman’s state liquified natural gas company, Oman LNG, signed three natural gas supply agreements totaling 2.35 million metric tons per year with the Japanese companies Itouchu, Jera and Mitsui. Oman will deliver the gas starting in 2025, the official Oman News Agency reported Tuesday. 

The governments of Oman and Japan also signed cooperation agreements related to hydrogen, clean ammonia, carbon recycling, oil and natural gas, according to the agency. 

Japan and Saudi Arabia also held their first-ever energy ministerial dialogue in Riyadh on Sunday. Nishimura and Saudi Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz led the meeting and discussed the “importance of supporting the stability of global oil markets,” the official Saudi Press Agency reported. The two countries also signed memorandums of understanding related to carbon recycling, ammonia and hydrogen.

Saudi Arabia and Japan also held a joint investment Monday and signed 15 additional bilateral agreements, per the agency. 

Why it matters: Oman is looking to boost its gas output, particularly with sales to Asia. Oman is also seeking more cooperation with Iran in this regard, according to an August report from Natural Gas Intelligence.

Oman’s liquified natural gas output reached a record high in 2021. 

Saudi Arabia has shown a lot of interest in hydrogen and ammonia as fuel sources, and in carbon capture technology. Saudi Aramco launched a sustainability fund in October to focus on carbon capture, hydrogen and ammonia. Last week, Aramco sent blue ammonia to South Korea. 

Japan is the third-biggest economy in the world. The East Asian country also recently agreed on a visa-free travel agreement with the United Arab Emirates. 

Know more: There were numerous renewable energy and natural gas agreements in the Middle East this year. Read Al-Monitor’s review of the region’s biggest energy deals in 2022.