Mitsubishi among firms OK’d by Canada to export shale gas

Kyodo

Major trading house Mitsubishi Corp. and three other companies jointly obtained approval from the Canadian government last month to export shale gas from western Canada to Japan and other parts of Asia, sources said Monday.

The approval to export shale gas in the form of liquefied natural gas for an annual total of 24 million tons over 25 years has been given to Mitsubishi, Anglo-Dutch oil giant Royal Dutch Shell PLC, Korea Gas Corp. and China National Petroleum Corp., the sources said.

The four firms are expected to begin producing about 12 million tons per year starting around 2020, they said.

Royal Dutch Shell has a 40 percent concession, while the three others have 20 percent each.

The four companies plan to build an export facility near the port of Kitimat, British Columbia.

Japan Petroleum Exploration Co. (JAPEX) meanwhile said Monday it will participate in a shale gas development and production project undertaken by Malaysian national oil company Petroliam Nasional Berhad (Petronas) in western Canada.

By acquiring a 10 percent stake in the project to produce 12 million tons of LNG annually from late 2018, JAPEX will export 1.2 million tons to Japan. The value of the deal was not disclosed.

Petronas is producing shale gas in the natural gas blocks of North Montney, British Columbia, and will increase production several times in the future, according to JAPEX.

The LNG exported to Japan will be received at a JAPEX facility to be built in the port of Shinchi, Fukushima Prefecture, for domestic sale.

With LNG prices remaining high, JAPEX said the deal will enable it to procure the fuel at lower prices than current levels.

Demand for LNG has surged in Japan for thermal power generation due to the halt of nuclear power plants because of the March 2011 disaster-triggered meltdowns at the Fukushima No. 1 atomic complex.

Demand is also expected to expand in growing Asian economies.