Sumitomo Corporation to make primary investment in a Singapore platform to enter city gas business in India

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno) will be entering the city gas business in India by making a primary investment in AG&P LNG Marketing Pte. Ltd. (hereinafter “Target Company”) through a Japanese consortium comprising a new SPC to be formed together with the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (Head Office: Chiyoda-ku, Tokyo; President and CEO: Tatsuhiko Takesada; hereinafter “JOIN”) and Osaka Gas Singapore Pte. Ltd. (hereinafter “OGS”), a subsidiary of Osaka Gas Co., Ltd. (Head office: Osaka City, Osaka Prefecture; President: Masataka Fujiwara; hereinafter “Osaka Gas”).

The Government of India is seeking to expand the use of natural gas (Note 1) by popularizing compressed natural gas (“CNG”) vehicles (Note 2) through the development of city gas distribution network (“CGD network”) and pursuing other approaches as measures to meet the increasing energy demand associated with economic growth and to reduce carbon emissions and air pollution, with the aim of becoming carbon neutral by 2070. City gas distribution companies are granted exclusive authorizations for laying, building, operating, or expanding the CGD network in given authorized areas (“GAs”) by the Petroleum and Natural Gas Regulatory Board of India.

The Target Company has investments in THINK Gas, which holds 7 GAs mainly in north-central India, and has investments in AG&P Pratham, which holds 12 GAs mainly in southern India. THINK Gas and AG&P Pratham have a total business area of approximately 325,000 km2 (Note 3), equivalent to around 90% of Japan’s land mass. The Target Company will continue to invest in developing CGD infrastructure (CNG stations, household connections, steel and MDPE pipelines) with a view to increase the sale of natural gas and help in the transition of India into a gas based economy.

The other investors in the Target Company will be the Funds managed by I Squared Capital, an independent global infrastructure investment manager focusing on energy, utilities, telecom and transport in the Americas, Europe and Asia, Osaka Gas, which operates a wide range of city gas businesses in Japan as well as India and other overseas locations, and JOIN, an infrastructure fund that supports Japanese companies engaged in infrastructure projects abroad by leveraging Japanese knowledge, technology, and experience. Sumitomo Corporation Group will contribute to LNG procurement, advanced inventory management, and sales expansion for commercial and industrial use by leveraging its accumulated knowledge and experience in various businesses inside and outside Japan.

Sumitomo Corporation Group regards natural gas and LNG as transition energy sources that play an important role in global decarbonization and is engaged in a variety of business development projects. The Group will contribute through this investment to India’s low-carbonization and decarbonization and to stable gas supply, based on the premise of achieving the Group’s goals of reducing CO2 emissions by 50% or more (from 2019 levels) by 2035 and making its business activities carbon neutral by 2050.

(Note 1)The Government of India in December 2019 announced a goal of increasing the share of natural gas in primary energy consumption in India from 6% at that time to 15% by 2030.
(Note 2)More than 700,000 CNG vehicles have been newly registered in India as of FY2022.
(Note 3)This area constitutes about 10% of India’s land mass and covers a population of about 85 million people.

1?Overview of city gas business in India

(1) Locations of AG&P Pratham’s/THINK Gas’s GAs

(2) Business scope

  • City gas and LNG procurement, receive/store, supply, sales and demand development in 12 GAs mainly in southern India and in 7 GAs mainly in north-central India

2?Company profiles

 -New SPC-

Company nameSJ CGD Pte. Ltd.
Date establishedOctober 2023
Location182 Cecil Street, #22-01 Frasers Tower, Singapore 069547
RepresentativeHirofumi Nakamura
Business scopeBusiness operation and management of Daigas SJ CGD Pte. Ltd.

-Japanese consortium-

Company nameDaigas SJ CGD Pte. Ltd.
Date establishedOctober 2023
Location182 Cecil Street, #30-02 Frasers Tower, Singapore 069547
RepresentativeTsujimura Hideomi
Business scopeBusiness operation and management of AG&P LNG Marketing Pte. Ltd. and its subsidiaries in India

-Target Company-

Company nameAG&P LNG Marketing Pte. Ltd.
Date establishedJanuary 2018
Location65 Chulia Street, #47-04 OCBC Centre, Singapore 049513
RepresentativeSayantan Lahiri
Business scopeInvestment in, City gas and LNG procurement, receiving/storage, supply, sales and demand development in 19 GAs, mainly in southern and north-central India