CALGARY – Japan Petroleum Exploration said Monday it’s buying into a planned West Coast gas export terminal and the B.C. shale gas lands acquired last year by Malaysia’s state-owned energy company Petronas.
Japex says it has agreed to take a 10 per cent stake in both Petronas’ properties in the north Montney region as well as a proposed liquefied natural gas plant on Lelu Island near Prince Rupert, B.C.
Petronas gained control of those assets through its $6-billion takeover of Calgary-based Progress Energy late last year.
The Japanese company has also committed to buy 1.2 million tonnes of liquefied gas per year — equivalent to 10 per cent of the plant’s annual capacity of 12 million tonnes.
At the facility, called Pacific Northwest LNG, the gas will be chilled into a liquid state so that it can be transported across the Pacific by tanker. Natural gas prices in Asia are several times higher than they are in North America, which has suffered from a major supply glut in recent years.
“With participation in this LNG project, Japex will be able to secure long-term natural gas import from Canada into Japan,” the company said in a release.
“Japex believes that importing natural gas as LNG from Canada, which has ample reserves, will help diversify Japan’s LNG imports, contributing to improves energy supply of Japan.”
Other Japanese companies are already involved in the B.C. natural gas scene.
Pipeline firm AltaGas Ltd. (TSX:ALA) and Idemitsu Kosan Co. Ltd. formed a partnership in January to explore shipping liquefied gas across the Pacific to Asian markets clamouring for new energy supplies.
The Calgary-based company and the major petrochemical and refining firm will each own half of the partnership, which envisions transporting both liquefied petroleum gas and liquefied natural gas overseas.
Nexen, which is now wholly owned by Chinese state-owned firm CNOOC Ltd., inked a joint venture with a consortium led by Inpex in late 2011.
The Inpex group has control over 40 per cent of Nexen’s northeastern B.C. shale holdings, and the two firms are in the early stages of examining LNG export options.
Mitsubishi Corp. is part of a Shell-led consortium behind an LNG terminal planned for Kitimat B.C. Mitsubishi also has a joint-venture with natural gas giant Encana Corp. (TSX:ECA) in northeastern B.C.
The future of nuclear power in Japan has been uncertain since a tsunami ravaged the Fukushima Daiichi power plant nearly two years ago, setting off a nuclear crisis. LNG is seen as one alternative to take nuclear energy’s place.