OBG talks to Jun Yanai, Senior Executive Vice-President and CEO, Energy Business Group, Mitsubishi Corporation

Interview: Jun Yanai

What role can international firms play in Brunei Darussalam’s economic diversification through their involvement in the energy sector and beyond?

JUN YANAI: Since its inception over 40 years ago, the Brunei Liquefied Natural Gas (BLNG) project has played a major role in making the country a world leader in LNG. Those in the LNG industry consider the Sultanate to be the pioneer in the sector, and BLNG, as one of the first world-class commercial LNG projects, has proven to be a cornerstone investment for our firm. BLNG remains an important model for our LNG projects around the world and is thus an example that both Brunei Darussalam and international corporations willing to invest here can jointly benefit.

The oil and gas industry and its corollaries remain important drivers of Brunei Darussalam’s economy, and we believe that the Energy Department at the Prime Minister’s Office’s “Energy White Paper” encapsulates the plan and vision that is necessary for the sustainable development of the sector. At the same time, we are also cognizant of the nation’s desire for greater economic diversification and have identified other flourishing areas of business, including agriculture, renewable energy and biotechnology, all of which make the country attractive to international investors.

For our part, we have long-term ambitions in promoting and developing each of the aforementioned promising industries in Brunei Darussalam. Furthermore, our focus on alternative green industries, such as our solar power facilities and a microalgae centre, is due to the fact that Brunei Darussalam has one of the most pristine natural environments on the globe and lush, virgin tropical rainforests, rare and precious assets in today’s rapidly industrialising world.

In what ways can international corporations contribute to the realisation of the goals set out in the “Energy White Paper”?

YANAI: The 2014 “Energy White Paper” clearly documents the country’s vision for the energy industry, and sector players have taken to heart the aspirations that it has set out and have been working hard to assist the government in achieving its goals. International corporations are, either independently or together with our local partners, involved in a number of energy projects at various stages of development.

Our focus has traditionally been centred on the BLNG plant, in which we are a 25% stakeholder, and together with our partners we view the BLNG plant’s long-term reliability and efficiency as vital to the attainment of the targets set out by the “Energy White Paper”. To that end, we have signed off on a $1bn rejuvenation project for the plant that should keep it competitive for at least another 40 years.

Further out to sea, we continue to play an active role in Brunei Darussalam’s upstream exploration activities, with a 6.25% interest in Block CA2. With promising results from the five exploratory wells already drilled, we have high hopes for the block and look forward to ensuring its timely development.

We also believe that the promotion of low-carbon technologies, as stated in the “Energy White Paper”, is an area that holds new opportunities for international investors, and pioneering new low-carbon technologies can be a key indicator of Brunei Darussalam’s sustainable energy credentials.

What impact will the renewal of supply contracts with Japan and South Korea have on LNG business in the short term?

YANAI: To preface, I think that it is important to understand that Japan and South Korea are considered the largest and most critical importers within the LNG market. In an increasingly crowded field with new players such as US shale on the horizon, the renewal of the supply contracts shows the market that Brunei Darussalam remains a reliable source of LNG for the most premium consumers of LNG in the world. As it was 40 years ago, Brunei Darussalam continues in its role as a major, dynamic player in the LNG industry.