Banpu targets investments in technology to cut carbon emissions

The move, he said, would include additional investment in Carbon Capture, Utilisation, and Sequestration (CCUS) technology, battery farms, and battery manufacturing. However, given the current state of the global economy, the company must proceed cautiously, awaiting the right time and price before making a move, he added.

Banpu’s confidence in continuing to invest in decarbonisation and other energy technology stems from previous successes, particularly CCUS projects in the United States.

These initiatives are expected to result in the production of Carbon Sequestered Gas, a Scope 1, 2, and 3 carbon neutral natural gas product.

“At the same time, we are driving the integration of digital technology and AI across all business units to improve operational efficiency and add value to Banpu’s ecosystem. This includes enhancing infrastructure and logistics management, expanding sales and marketing opportunities, reducing costs, and increasing competitiveness, particularly in the energy resources sector in Indonesia and the United States,” he said.

The move also coincides with a surge in demand for green energy sources, with data centres being prime examples of where Banpu intends to play a key role as an eco-friendly energy solution provider.

“We are now in discussions with potential international partners. We would like to introduce net zero gas to these data centres,” he said.

The majority of the US$350 million in total investment funds this year would be invested in decarbonisation, he added.

Given that the global energy industry landscape is shifting towards green and clean requirements, Sinon pointed out that decarbonisation efforts, along with digitalisation, would help the company achieve long-term stability.

Banpu’s US subsidiary, BKV Corporation (BKV), recently sold some of its non-operated upstream and midstream assets in Pennsylvania’s Marcellus Shale for a combined price of around $132 million, subject to adjustments. This strategic move will allow BKV to maintain capital discipline while focusing on the growth of its higher-return assets.

In addition, the Ponder Solar project, a 2.5-megawatt solar power plant in Texas’ Barnett Shale, is scheduled to begin operations in August 2024.

This project is a crucial step on BKV’s path to achieving net zero Scope 2 emissions from its owned and operated upstream and natural gas midstream businesses, Sinon said. BKV’s path to net zero is expected to include lowering its direct and indirect greenhouse gas emissions, reducing its reliance on external electricity purchases, using self-generated power from renewable energy sources such as the Ponder Solar project, and implementing CCUS projects to sequester its and third-party emissions.

Sinon’s announcement came on the same day that the company reported resilient operating performance in the first half of the year. It reported total sales revenue of $2.441 billion, earnings before interest, taxes, depreciation, and amortisation of $650 million, and net profit of $69 million.

Banpu’s energy segment operates two main businesses: mining and gas. It intends to reduce expenses in the mining sector by $1.5 to $3 per tonne, while in the gas division, costs are expected to be reduced by $0.06 to $0.07 per Mcf.

In the gas business, Banpu’s subsidiary BKV recently formed strategic alliances with Engie Energy Marketing NA, Inc and Kiewit Infrastructure South Co. These agreements focus on the sale and purchase of carbon sequestered gas, and represent a significant step forward in Banpu’s commitment to sustainable energy solutions, Sinon said.

It plans to begin delivering carbon sequestered gas by the end of 2024, subject to the successful completion of BKV’s certification process with the American Carbon Registry.

The energy generation business has maintained strong profitability. In the thermal power business, the Temple I and II gas-fired power plants in the US reported sales revenue of $288 million, a big jump year on year, owing to increased electricity sales from the acquisition of the Temple II gas-fired power plant in the third quarter of 2023. Solar power plants in China, Japan, Vietnam, and Australia provided consistent cash flow in the renewable energy industry.

Banpu’s energy technology company continues to expand investment in various potential businesses, with a focus on green energy solutions for the future, such as solar cells, batteries, electric vehicles, and power management.

In the first half of 2024, Banpu NEXT’s solar rooftop business secured contracts totalling 1.9MW capacity in Thailand and signed a 10MW power purchase agreement in Indonesia. The battery and energy storage systems division initiated production at the SVOLT Thailand factory, while another plant supplied its inaugural batch of nickel manganese cobalt oxide batteries to Thailand’s largest bus service provider, the CEO said.

The e-mobility sector saw MuvMi electric tuk-tuks joining a government-backed support programme for electric public vehicles, having provided over 13 million rides to date. The energy management division expanded its district cooling system at the Government Center Zone C and secured 25 contracts at the SB Design Square in Phuket.

Meanwhile, Banpu’s corporate venture capital arm invested in “enspired”, a trading-as-a-service business, aiming to bolster AI capabilities for its battery and energy trading operations.

Looking ahead, Banpu aims to focus on improving operational efficiency and implementing cost control measures, advancing efforts to reduce carbon dioxide emissions, enhancing digital operations, and carefully allocating capital expenditure, Sinon said.