Australian brown coal will be converted into liquid hydrogen for export to Japan in the world's first such fuel project, Prime Minister Malcolm Turnbull said Thursday.

The multibillion-dollar Hydrogen Energy Supply Chain pilot will see brown coal from the Latrobe Valley in the state of Victoria turned into liquefied hydrogen before it is shipped to Japan in a project the prime minister described as producing the "energy of the future."

"It is amazing to think that brown coal here in Victoria will keep the lights on in Japan," Turnbull said at a news conference in the Latrobe Valley.

The prime minister said he has often discussed the project with Prime Minister Shinzo Abe, who he said is "very excited" about the pilot.

With A$50 million ($38.7 million) financial assistance from both the Australian federal government and Victorian state government, the project is to be undertaken by four Japanese companies — Kawasaki Heavy Industries Ltd., Electric Power Development Co., commonly known as J-Power, Iwatani Corp. and Marubeni Corp., as well as Australian company AGL Energy Ltd.

Construction of pilot-related facilities is scheduled to begin in 2019, with the production of hydrogen and its transport via land for export expected to take place sometime between 2020 and 2021.

The trial is expected to create up to 400 local jobs.

The Latrobe Valley is part of the Gippsland Basin, which is home to the largest deposits of brown coal in the country.