By MARI IWATA
TOKYO -- Energy companies from China, South Korea and Japan
have put aside political and commercial rivalries to ship
billions of dollars worth of Canadian liquefied natural
gas to Asian markets, but they will face stiff competition
for supplies and customers from a raft of competing
In a landmark agreement, Mitsubishi Corp., Korea Gas Corp.
and PetroChina Co. late Wednesday said they and Shell would go
ahead with a "LNG Canada" project to pipe gas to the Pacific
coast, where it will be deep-chilled and exported by sea.
The news comes at a time of rapidly rising Australian LNG
output, with much of that directed at the same Asian markets, a
likely outflow of large volumes of Canadian and US LNG
due in part to the shale gas boom, the planned exploitation of
huge gas reserves in countries such as Mozambique and expansion projects by top exporter Qatar.
decision follows the Canadian government approving two smaller
LNG export projects at Kitimat, British Columbia, designed to
diversify Canada's energy sales away from the US and towards to
One is an Apache Corp.-led venture for up to 10 million tpy
of gas, and the other is the BC LNG
Export Co-operative, which plans to ship out 2.4 billion cubic
The Asia-Shell project is for a two-train, 12 million tpy
export terminal at Kitimat, with a final investment decision
slated for 2015 and exports by 2019, potentially rising to 24
Shell has a 40% stake and the three Asian companies 20% each,
or the equivalent of 2.4 million tpy each in the first phase.
Cost estimates haven't been given.
The project is subject to Canadian
government review, PetroChina spokesperson Mao Zefeng said
A Mitsubishi spokesman said the partners aren't worried
about feedstock competition as "there are
plenty of gas resources in the Western and mid-Western part of
Canada." Customers will mainly be in Asia, including Japan, but
allocations, buyers and pricing system haven't yet been
decided, he said.
Japan and South Korea are the world's top two LNG importers,
and China was seventh ranked according to 2010 data. Import
volumes from Japan and China are climbing rapidly.
Japan's LNG imports rose 18% on year to 83 million tons in
the year ended in March 2012, as utilities boosted thermal
power station rates following the Fukushima Daiichi disaster
and the closure of Japan's nuclear reactor fleet.
For its part, China's LNG
imports jumped 31% last year, and further big rises are
expected as a string on receiving terminals are under construction and the government
gas to take a much larger share on the national energy
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