The Japan Petroleum Exploration Company (Japex) will buy a 10 per cent stake in a Petronas liquefied natural gas (LNG) development project in British Columbia. Petronas, the Malaysia-based oil and gas company, will hold the remaining 90 per cent. The development, known as the Pacific Northwest LNG project, will include the construction of an LNG plant on an island offshore from Prince Rupert, BC.
Japex would take approximately 1.2 million metric tons per year from the development and market it in Japan, the world’s largest importer of LNG.
Petronas, as the Japex announcement indicates, has “extensive experience” with LNG. The company has been operating in Canada, where it has been producing and selling natural gas, and plans to transport the gas by pipeline to the west coast.
The project would involve two plants, each with a capacity of 6 million metric tons per year, at a cost of between $9 billion and $11 billion. The development would be operational in 2018.
TransCanada Pipeline is expected to sign a contract with Petronas to build the pipeline, which will run 750 kilometres from the North Montney shale gas block to the LNG plant. The block is estimated to contain several trillion cubic feet of gas, enough to provide feedstock to the new LNG plant for at least twenty years.
A new company, Japex Montney Ltd, will operate from Calgary in dealings with Petronas and with Progress Energy Canada. The Japanese government holds a 34 per cent interest in Japex.