future business development in the transition period of
TRANSCRIPT
Future Business Development in the Transition Period of Energy
Resources
August 18, 2021
(Security code: 6376)
NIKKISO CO., LTD.
Copyright © 2021 NIKKISO CO., LTD. All rights reserved.
Business characteristics
2
Industrial gas
Petrochemical
Pharmaceuticals, semiconductors, etc.
(Hi-tech)
Ene
rgy
Oil & gas
Nuclear/thermal power
generation
Low carbon (LNG/LPG)
Decarbonization
Major initiatives and measures
• As the demand for oxygen for hospitals and raw material gas for semiconductors is firm despite the COVID-19 pandemic, we will promote low-cost production at our factory in India, and strengthen market development in developing countries
• Establishment of production and sales systems in response to supply chain changes in China and the Middle East
• Establishment of order-receiving and production systems for mass construction of the floating production, storage and offloading systems (FPSO)
• Construction of a slim business structure for precision equipment to match the scale of business after the Great East Japan Earthquake
• Development of new applications such as biopharmaceuticals and 5G based on experience gained in petrochemicals and multilayer ceramic capacitors, etc.
• Markets are linked with GDP growth
• Long-term steady growth is expected
• Local production for local consumption
• Markets grow or shrink heavily depending on change in supply and demand by region and industry in the global supply chain
• Heavy reliance on large investments in advanced technologies
We are managing a portfolio balanced against economic fluctuations and transition in the industrial structure
Sales volume (billion yen)
16(18%)
32(35%)
5(6%)
5(6%)
4(4%)
27(30%)
1(1%)
• Integrated operation of CE&IG by making NCI a subsidiary
• Introduction of LNG/LPG test facilities for cryogenic pumps at the Miyazaki Factory
• Start and acceleration of development of products for hydrogen and ammonia in Japan, the United States, and Europe
• Market formation changing dynamically over the medium to long term due to a variety of factors, including ones previously considered non-economic, particularly short-term energy supply-demand relationships and energy policies in each country
- Availability of primary energy and energy mix in each country
- Geopolitics, low- and de-carbonization, and reduction of environmental impact
• Supply of infrastructure equipment faces competition in the globalized supply chain
Total: approx. 90 billion yen
Business Portfolio
Copyright © 2021 NIKKISO CO., LTD. All rights reserved.
10 20 30-50 100-150200250
350400
450
805 865950
1,200
0
500
1,000
1,500
FY2020
(実績)
FY2021
(予想)
FY2022
(中計)
FY2025
(中計)
FY2030
脱炭素化 低炭素化(LNG/LPG) その他
The following and subsequent pages explain energy conversion, which is changing significantly around the world
Low- and de-carbonizationenergy business
3
Trend in sales of Industrial Business
(billion yen)
Toward the Medium-Term Business Plan “Nikkiso 2025” and 2030
Decarbonization Low carbonization (LNG/LPG) Other
FY2020
(Actual record)
FY2021
(Forecast)
FY2022
(Mid-term plan)
FY2025
(Mid-term plan)FY2030
50
100
150
20
86.595.0
120.0
80.5
2535
40
45
10-153-521
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 4
1. History of Nikkiso’s flexible response to several energy shifts, recognizing them as business opportunities
• Coal → Oil → Nuclear power → LNG
2. Acceleration of existing initiatives
• Making sure to capture demand by enhancing our manufacturing capacity of products for LNG/LPG as transient energy toward decarbonization
3. Response to new changes
• Involvement in advanced projects in the 2020s for full-scale deployment of decarbonized energy between 2030 and 2050
˗ “Green” Energy – Hydrogen and hydrogen carriers
˗ “Blue” Energy – CCS/CCUSDNV GL ENERGY TRANSITION OUTLOOK 2020
Decreasing expenditure on fossil fuels
Increase and shift in expenditure on non-fossil fuels
Nikkiso’s policy on response to energy conversion
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 5
1. Further expansion of LNG/LPG supply chain globalization
• Exporters: Russia (Arctic 2), Qatar
• Importers: China, India, Southeast Asia
• Consumption: Expansion of the range of small scale applications as importing regions expand geographically
2. New applications as alternative energy
• LNG-/LPG-powered ships: Orders received for fuel filling systems worth approx. 8 billion yen in 1H FY2021
◆ Enhancement of manufacturing capacity to meet growing demand, and promotion of localization of sales and manufacturing• 2021: Assembly of pumps and operation of LNG/LPG test facilities in Miyazaki
• 2021: Consolidation and enhancement of CE&IG sites in Malaysia
• 2022 plan: Assembly of fuel gas supply systems for LNG-powered ships and operation of liquid nitrogen test facilities in South Korea
• In other areas, we will continuously consider approaches that efficiently utilize resources of Industrial Business companies
DNV GL ENERGY TRANSITION OUTLOOK 2020
Investment level until 2020
Capturing demand through our capacity enhancement
Business opportunities to capture
Our approach
Business Opportunities in Low-Carbonized Energy (LNG/LPG)
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Production Consumption
Experience and technology developed in petrochemical and LNG/LPG can be applied to Green and Blue energy businesses
Transportation
By-product hydrogen
(Chemical factories, etc.)
CO2(CCS/CCUS)
Fossil fuel reforming
Renewable energy electrolysis/biomass
Solar Wind power Biomass
Petroleum(Refineries)
LNG(Terminals)
Coal(Australian brown coal)
Liquefied hydrogen
LH2
Liquid ammonia
LNH3
Organic hydride
CH3
Use as electricity
Ammonia/hydrogen power generation
(Mixed combustion)
Fuel cell distributed power supply
Hydrogen stations Hydrogen- and ammonia-powered ships
Use as fuel
MCH
Toluene Methylcyclohexane
Nikkiso’s Approach to Decarbonization
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 7
H2 Liquefaction Plant
Plant Storage
H2 pipelineor Natural Gas Pipeline
Virtual Pipeline / Power Generation
Bunkering Facility
GH2
Filling Station
Tender Filling
H2 PoweredCars, Forklift,
Buses, Trucks, and Mining
Vehicles
H2 PoweredShips
H2 / H2mixed Firing,
Fuel Cell Power Production
H2 Powered
Railroads
Filling and Consumption
LH2
Hydrogen Production Liquid Hydrogen Processing and Transportation
LH2
LH2
LH2
LH2
Ship-to-ship Transfer
FSRU
LH2 Trucking
LH2
LH2 Trading/Export
Terminal
LH2 LH2
GH2
LH2 ReceivingTerminal
LH2 LH2
LH2
LH2/GH2
LH2 Shipping
LH2 LH2 LH2
LH2 Truck Loading System
H2 pipelineor Natural Gas Pipeline
LH2
Heat Exchanger Systems Cryogenic Pumps
Reciprocating Pump
Centrifugal Pump
Cryogenic Service
Service is provided for all products.
Process Systems
Turboexpander
Integrated Cryogenic Solutions
We provide turnkey solutions for the entire Value Chain.
VaporizerLiquefier
Industrial Feedstock
Heat Generation
GH2
Fossil Fuel
+ -Electolysis
Gasfication/Reforming
hydrocarbon
GH2
GH2
Water
Water
GH2
GH2
GH2
GH2
GH2
Biomass
Airplane Filling
LH2
LH2
Rocket Filling
H2 Powered Airplanes
Rockets
Oxygen Liquefaction Plants Plant
Storage
LOX Trucking
LOX
LOX
O2
LOX Truck Loading System
O2
GH2
Covering a wide range of our products from upstream to downstream in the hydrogen value chain as well as oil, gas, and LNG
Hydrogen Value Chain and Our Product Lines
Copyright © 2021 NIKKISO CO., LTD. All rights reserved.
1. Expansion of liquid hydrogen station business in California, U.S.• Stations for forklifts, which are already in the spreading phase
• Full-scale operation of stations for passenger cars from 2020
• Bus stations, which started to be launched in 2021
• Truck stations, whose demonstration has started for commercialization in or after 2023
2. Expansion to various applications including liquid hydrogen import supply chains and power generation in Japan• Participation in many advanced demonstration projects targeted around 2025
3. Hydrogen exports from the Middle East, Australia, and Southeast Asia• Participation in advanced projects utilizing approaches linked to imports above
8
The product and market development efforts to date have taken shape. We have already received inquiries from many customers as leads, and started receiving more orders from this term
Business opportunities to capture
Our approach
◆ Taking advantage of technology and experience in hydrogen as industrial gas and LNG/LPG
• Liquid hydrogen stations
- Utilizing GP Strategy Alternative Fuel Division acquired in 2020 to supply a set of equipment required for stations as EPC
- Deepened collaboration with hydrogen suppliers and station operators
• Advanced projects
- Promotion of the development of capacity enlargement through the tripolar system of Japan, the United States and Europe in response to increasing demand based on products for and experience in hydrogen as industrial gas
Consumption
Transportation Consumption
Production Transportation
Business Opportunities in Decarbonized Energy: (1) Liquid Hydrogen
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 9
Inquiries have increased rapidly this year, based on experience and technology of LPG and ammonia as an industrial raw material
Ammonia plants Ammonia transport
Power plants
Ammonia-receiving terminals
Hydrogen separation facilities
To the hydrogen market
Ammonia-powered shipsAmmonia-filling facilities
Production ConsumptionTransportation
Business opportunities to capture
Our approach
1. Exports from the Middle East, Australia, and Southeast Asia
2. Expansion to various applications including ammonia import supply chains and power generation in Japan
3. Introduction of new ammonia-powered ships, conversion from or combined use of LPG- or LPG-powered ships
◆ Development of submerged pumps for prestressed concrete tanks (PC tanks) in demand due to enlargement of receiving terminals• Competitive advantage gained by having both canned motor technology and cryogenic submerged pump
technology
◆ Taking advantage of experience in LPG-powered ships
Production Transportation
Transportation Consumption
Consumption
Business Opportunities in Decarbonized Energy: (2) Ammonia
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 10
Pumps for discharging and feeding liquid from a tankCanned motor pumps
• Experience of 26 units: 7 ships in Japan, 15 ships overseas, and 4 units for ground testing
• Possible to use in ships powered by ammonia with similar liquid properties or ships powered by both ammonia and LPG
Boosting pumps for feeding liquid to engineLEWA reciprocating pumps
Cases of LPG-Powered Ships
Copyright © 2021 NIKKISO CO., LTD. All rights reserved.
Example: CCS by the amine adsorption method
11
Snøhvit Project on the Melkoya island in Norway
• Multiphase flow transportation using LEWA diaphragm pumps through a 140 km undersea pipeline on the seabed at a depth of 250 to 345 m
Case: Seabed transportation of CO2
Selection of canned motor pumps necessary for the amine adsorption process and optimization for the process are under consideration
Cases of absorption of CO2 using amine absorbent and recovery as high-concentration CO2 have been developed globally by coal-fired power generators, etc.
• Mitsubishi Heavy Industries: Delivered a total of 14 recovery plants in Europe, the United States, Southeast Asia, India, etc.
• Toshiba
• CESAR (CO2 Enhanced Separation and Recovery, EU Project), etc.
Business Opportunities in Decarbonized Energy: (3) CCS/CCUS
Copyright © 2021 NIKKISO CO., LTD. All rights reserved. 12
1. The collaborative development system utilizing technologies the Industrial Business has globally
˗ Adoption of Higashimurayama Plant as Engineering Center
˗ Cooperation and clarification of roles within the Nikkiso/LEWA/CE&IG Group
˗ Complementary relationships through alliances with other companies
2. Geographic expansion by effectively utilizing the manufacturing capacity the Industrial Business has globally
˗ Manufacturing and large testing facilities in Miyazaki to cover global markets
˗ Development and enhancement of regional bases
3. Global and regional sales systems mutually utilizing the customer bases the Industrial Business companies have globally
˗ Nikkiso has strengths in Japan
˗ LEWA/Geveke have strengths in Europe
˗ CE&IG has strengths in North America
˗ Mutually utilize bases in Asia and other regions
Business Structure and Challenges for Next-Generation Energy
Copyright © 2021 NIKKISO CO., LTD. All rights reserved.
10 20 30-50 100-150200250
350400
450
805 865 950
1,200
0
500
1,000
1,500
FY2020
(実績)
FY2021
(予想)
FY2022
(中計)
FY2025
(中計)
FY2030
脱炭素化 低炭素化(LNG/LPG) その他
• Steady progress toward the midpoint (2022) of the Medium-Term Business Plan, mainly due to the expansion of the LNG-powered ship business
• Aim to achieve Phase 2 of the Medium-Term Business Plan (2025), focusing on the expansion of low- and de-carbonization businesses
• Expand the low- and de-carbonization businesses to over 50 billion yen
13
Low- and de-carbonizationenergy business
Trend in sales of Industrial Business
(billion yen)
Toward the Medium-Term Business Plan “Nikkiso 2025” and 2030
Decarbonization Low carbonization (LNG/LPG) Other
FY2020
(Actual record)
FY2021
(Forecast)
FY2022
(Mid-term plan)
FY2025
(Mid-term plan)FY2030
50
100
150
86.595.0
120.0
80.5
2025
3540
45
10-153-521