Japex to Buy 10% of Petronas Canada LNG Project

TOKYO - Upstream energy company Japan Petroleum Exploration Co. said Monday it has agreed with Petroliam Nasional Berhad, or Petronas to buy 10% of a Canada liquefied natural gas venture and shale gas project controlled by the Malaysian state-owned energy company.

Its preliminary agreement to join the British Columbia Pacific Northwest LNG scheme and buy into the associated North Montney gas development is the latest in a string of moves by Japanese energy companies seeking to line up relatively cheap gas in North America to ship home to meet rising LNG demand caused by a shift away from nuclear power.

The Japanese upstream company, also known as Japex, will find ways to price the LNG at "reasonable levels," said Man Saito, Japex's Managing Director told reporters.

Mr. Saito said Japex is considering using more than one benchmark to price the gas it exports from Canada, but didn't give details.

Once finalized, Japex would receive 1.2 million metric tons of LNG annually from the project. He didn't disclose the price Japex will pay.

The Pacific Northwest LNG export terminal project in British Columbia was acquired by Petronas last year as part of its $5.2 billion purchase of Canada's Progress Energy Resources Corp.

The 12 million tons-a-year terminal, to be located on the Lelu island in the port city of Prince Rupert, will cost up to C$11 billion ($10.7 billion) to build, Petronas has said.

Petronas aims to make a final investment decision on it by the end of 2014 and start commercial operations by the end of 2018.

It is just one of several energy companies building LNG export terminals in Canada and the U.S. to create outlets for surplus gas caused by shale-drilling technology that has unlocked massive new reserves.

The oversupply has caused North American gas prices to fall to below $2 a million British thermal units earlier last year, compared with as much as $18/MMBtu in Asia, where LNG is priced against oil.

Royal Dutch Shell Plc is spearheading one LNG venture at Kitimat, some 200 kilometers from the Petronas one, working with several Asian partners including Japan's Mitsubishi Corp.

Another LNG project is a 50-50 joint venture by Chevron Corp. and Apache Corp, also at Kitimat.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
ARAMCO QM20 Third Party Inspector
Expertise: Electrical Engineering|QA / QC / Inspection|Technical Writing
Location: Bolingbrook, IL
Project Manager, Oil and Gas
Expertise: Petroleum Engineering|Project Management
Location: West Chicago, IL
Business Development Manager
Expertise: Business Development|Construction Manager
Location: Portland, OR
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours