Mitsui & Co. and the government-affiliated Inpex Corp. may participate in a Qatari project to develop low-pollution liquid fuel from natural gas, company sources said Friday.
Mitsui will launch an investigation next year into the feasibility of the project, which aims to produce alternative fuel to replace gas oil by employing a new gas-to-liquid technology, the sources said.
GTL gas oil, which contains less sulfur, is environmentally friendly, but production costs remain high.
Ss prices come down with mass production, however, its use is expected to grow in Japan as an alternative fuel for diesel vehicles, analysts said.
The project will be led by Ivanhoe Energy Inc. of Canada, which owns gas liquefaction technology, and Qatar government-owned Qatar Petroleum. Mitsui will cooperate with them in market research and fund procurement.
The Japanese companies will formally join the project after they confirm its profitability, the sources said.
Qatar agreed with the Japanese government in October to allow Japanese companies to participate in the GTL businesses.