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.

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

Sumitomo Corporation’s Material Issues

Sumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to the following material Issues.

Achieving Harmony with the Global Environment

To realize recycling-oriented society and mitigate climate change, we are working to establish frameworks for the efficient use of resources and stable supply of renewable energy. In doing so, we will achieve growth in harmony with the global environment.

Contributing to the Development of Local Communities and Industries

We steadily procure and provide goods and services to meet the needs of people in various countries and regions and contribute to developing industrial platforms. Through these means, we will create a virtuous cycle in which we can grow and develop together with local communities.

Establishing a Foundation for Comfortable and Enriching Lifestyles

We strive to realize more convenient and comfortable lifestyles by providing goods and services for daily use while also responding to needs for high-quality lifestyles in order to support the physical and mental health of people around the world.

Providing Diverse “Accessibility”

We provide diverse accessibility to open up the possibility of creating new value. To this end, we will improve mobility for safe and efficient flow of people and goods, and expand the network connecting information and finance.

Developing Human Resources and Promoting Diversity

In order to create new value and innovation by allowing our diverse personnel to fully exercise their abilities in a variety of fields, we will promote the development and empowerment of human resources, which represent our most important management resources.

Enhancing Governance

We will enhance our ability to draft and implement strategies for achieving sustainable growth and to provide appropriate supervision of these strategies, all while maintaining transparency. In this manner, we will improve management efficiency and maintain sound management.