By MARI IWATA
TOKYO -- A Japanese energy company on Tuesday said it is
partnering a Canadian firm to export North American natural
gas from Canada's West Coast to Japan and elsewhere in
Asia, aiming to meet part of Japan's sharply rising demand for
the clean-burning fuel to make up for idle nuclear power
Under the 50:50 plan by oil refiner Idemitsu Kosan Co. and
gas pipeline operator AltaGas, the two may build a liquefied natural
gas export terminal near Kitimat in British Columbia,
possibly starting LNG exports mainly to Japan as early as
"Canada is one of the world's most resource-rich countries
and has proven to be a very promising new supplier of gas to
Japan. We believe that a joint venture with AltaGas will
enhance the businesses of both companies while making a
significant contribution to the national interests of both
Canada and Japan," Idemitsu president Kazuhisa Nakano said in a
The venture expects to use AltaGas' 500-kilometer natural
gas pipeline linking gas-rich Alberta to Kitimat on the
"If we can expand the capacity of the pipeline, we would
like to build a terminal with 2 million metric tons of
capacity," an Idemitsu spokesman said.
The joint venture also plans to develop a liquefied
petroleum gas export business, building on the Japanese
company's expertise in the sector. Idemitsu is a shareholder of
Astomos Energy Corp., one of the world's largest LPG
Several Japanese companies are trying to line up supplies of
US and Canadian gas, encouraged by gas there costing less than
a quarter of the price of LNG
imported into Japan from suppliers in the Asian region. Export
projects being looked at include
both the shipping of gas from the west coast of Canada and via
the Gulf of Mexico.
The Idemitsu-AltaGas partnership is in a good position to
clear regulatory hurdles, as Canada is more positive about gas
exports than the US, the spokesman said.
projects have sought US government
approval for exports. But so far, only Cheniere Energy has
received permission to ship gas abroad, from its terminal in
Louisiana, but only to countries that have free-trade
agreements with the US. Japan doesn't have such a treaty with
Under the plan, the two companies intend to buy gas in the
open market to feed the terminal, rather than invest in gas
production, the spokesman said.
Japan's LNG imports rose 11% to 87 million tons in 2012,
following 12% growth in 2011, as power utilities switched to
thermal power generation in the aftermath of the nuclear power
accident in Fukushima in March 2011.
Canadian Minister of Natural Resources Joe Oliver has
visited Japan twice since the Fukushima nuclear disaster,
offering Canadian LNG for Japan.
There are several LNG exporting projects on Canada's Pacific Coast
and if all were approved, they would be able to export roughly
66 million tpy of LNG,
Mr. Oliver said.
Dow Jones Newswires