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Japan Successfully Extracts Natural Gas from Underwater Deposits of Flammable Ice

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methane_hydrateOn March 12, 2013, Japan became the first country to successfully extract natural gas from underwater deposits of methane hydrate. Methane hydrate is a frozen gas that is referred to as flammable ice or fire ice. State-run Japan Oil, Gas and Metal National Corporation (JOGMEC) have been spearheading the initiative.

Japan is a major importer of energy. In fact, the country is the number one importer of liquefied natural gas (LNG). With renewable sources of energy like wind and solar still in early stages and the catastrophic nuclear incident, this breakthrough could be a net positive for Japan’s energy needs. The big question presents the issue of commercial viability and scalability. If the technology is scalable like fracking was for the Americas, it could greatly influence energy extraction. This possible technological impact would increase flows to sovereign wealth funds and possibly create new energy funds globally. If Japan were to rely less on LNG imports, it would have a negative effect on current LNG exporters.

Cost-effective, innovative extraction methodologies lead to energy bonanzas.

Before people get their hopes up, there are some pressing issues. It will take time as Japan plans to have a commercially viable model in place by 2019. In addition, methane hydrates are located in colder environments or places that are challenging to drill and extract.

JOGMEC believes at a minimum there are 1.1 trillion cubic meters of methane hydrate in the Eastern Nankai Trough where it is currently drilling. This amount of methane hydrate is enough to provide Japan with enough natural gas for a little more than a decade. In total, off Japan’s coast there is an estimated 7 trillion cubic meters of methane hydrate.

SWFI First Read, January 19, 2018

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RDIF Portfolio Company PhosAgro Raises Bond Issue

PhosAgro is a portfolio company of the Russian Direct Investment Fund (RDIF). The company price out a US$ 500 million 5.25-year Eurobond issue that has a coupon of 3.949%.

Alison Swonnell Named Global Head of Institutional Marketing at Fidelity International

Alison Swonnell was hired on as Global Head of Institutional Marketing at Fidelity International. She will be based in London and report to Chuch McKenzie, the firm’s global head of institutional clients. Before Fidelity, Swonnell was Director of Fund Operations for LCM Partners, an alternative investment management firm.

NY Governor Cuomo Seeks to Treat Carried Interest as Ordinary Income for State Taxes

On January 18, 2018, New York Governor Andrew Cuomo revealed he had submitted a bill to the New York State Legislature that seeks to treat carried interest as ordinary income rather than capital gains in regard to state taxes. Governor Cuomo in his press release said that the federal carried interest tax provision costs New York roughly US$ 100 million per year.

William Bain – Bain Founder Passes Away

Dated January 18, 2018, William Bain Jr. passed away at his home in Naples, Florida at the age of 80. Bain started at the Boston Consulting Group and left in 1973 to form Boston-based Bain & Co. By 1984, Bain formed Bain Capital alongside a number of colleagues including former 2012 Republican presidential nominee Mitt Romney. In a statement to the Boston Globe, Romney said, ” It’s hard for me to imagine my life and career without Bill Bain’s mentoring.”

Prostar Capital Gets Controlling Stake in Socar Aurora Fujairah Terminal

Prostar Capital now has a 90% control stake in Socar Aurora Fujairah Terminal FZC by purchasing 100% of the shares of Socar Aurora Terminals S.A. The Prostar Capital entities investing in the asset are Prostar Asia-Pacific Energy Infrastructure Fund and a co-investment fund managed by Prostar Capital for a large U.S. state pension plan. The storage terminals acquired in the Port of Fujairah in the United Arab Emirates.

Socar Aurora Fujairah Terminal FZC is a joint venture between State Oil Company of Azerbaijan Republic (SOCAR), Swiss-based commodity trader AURORA Progress, and the Government of Fujairah.

Prostar Capital started buying the terminal back in 2013 at 18.6%. The private equity firm eventually moved its ownership up to 40% on August 14, 2015.

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ISIF Plans to Back 20 Solar Farms in Ireland

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The Ireland Strategic Investment Fund (ISIF) and Hamburg-based Capital Stage, a solar and wind park operator, are financially backing the development of 20 solar farms in Ireland which has an estimated cost at €140 million. ISIF is funding 25% of the costs, with Capital Stage providing 75% of the costs.

The generation capacity is estimated at 140 MW, with each farm ranging between 5 MW to 25 MW. The majority of the solar farms will be located along the east and south-west coasts of Ireland. Power Capital, a Dublin-based energy company formed by Peter Duff and Justin Brown in 2011, is overseeing the developments.

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PNB to Buy Stake from Malaysian Developers in Battersea Power Station Project

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Malaysia-based Permodalan Nasional Bhd (PNB) inked plans to acquire a stake in the Battersea Power Station from Malaysian developers Sime Darby Property and SP Setia, which between them own 80 percent of the site located on the south bank of the Thames. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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