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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, September 21, 2018

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U.S. Public Becomes More Aware that Gmail Scans Emails

Alphabet is a major stock holding for sovereign wealth funds and large pensions. Search giant Google is under fire for allowing third-party partners and companies, like Return Path Inc and other advertisers, to share data from Gmail accounts. Many experts and tech observers already knew this, but more people in the public are becoming aware of Google’s practices when it comes to privacy. Google disclosed in a letter to U.S. lawmakers this finding. The Wall Street Journal reported that in some instances, app companies were able to read people’s emails in order to improve their algorithms. In 2017, Google said they would stop scanning all of one’s Gmail messages for the goal of personalized ads.

GPIF Infrastructure Exposure Almost Reached 200 Billion Yen in March 2018

Japan Government Pension Investment Fund’s (GPIF) exposure to infrastructure real estate was 196.8 billion JPY at the end of March 2018. At that period, 57% of the exposure was to the UK, 15% was to Australia, 15% to Sweden, 10% to Spain and 3% to Finland. 21% of GPIF’s infrastructure portfolio was linked to airports versus 27% to ports.

AIMCo-backed sPower Closes $498.7 Million Bond Deal

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Iceland Contemplates a Sovereign Wealth Fund

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The Government of Iceland is looking to possibly form a sovereign wealth fund to stabilize the country from unforeseen shocks to the national economy. The Iceland government released a statement saying, “The state’s contributions to the Fund will be equivalent to new revenues from publicly owned power production companies which are expected to accrue in the coming years.”

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CBRE Global Wins First GPIF Global Real Estate Mandate

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Japan Government Pension Investment Fund (GPIF) awarded its first global real estate mandate by hiring CBRE Global Investment Partners Limited. This is a global core real estate fund-of-funds separate account. Overseeing this mandate as a gatekeeper is Asset Management One Co., Ltd., which is a unit of Mizuho Financial Group. This RFP was launched in April 2017.

CBRE Global Investment Partners is the multi-manager arm of CBRE Global Investors.

In addition, on August 8, 2018, GPIF hired two custodians for short-term investments. These custodians are Trust & Custody Services Bank, Ltd and The Master Trust Bank of Japan, Ltd.

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