Big builders jumping on board shale gas boom

JIJI

Japanese shipbuilders and heavy machinery makers are stepping up efforts to expand operations, taking advantage of an expected start of full-fledged exports of shale gas, a type of natural gas, by the United States.

Mitsubishi Heavy Industries Ltd. and Imabari Shipbuilding Co. have teamed up so they can jointly construct at least eight tankers for liquefied natural gas a year.

A Mitsubishi Heavy executive said the firm is now prepared to compete better with South Korean rivals that have large shipyards, stressing that the two partners will work together to win LNG ship orders in the international market.

Mitsubishi Heavy will also expand production of compressors used in liquefying natural gas and making ethylene, company officials said.

In addition, the firm will build a compressor plant in the United States in a year or two in an effort to boost sales mainly to U.S. petrochemical makers, they said.

Through these measures, Mitsubishi Heavy aims to increase its compressor sales to ¥100 billion in fiscal 2014 from some ¥60 billion in fiscal 2011, according to the officials.

IHI Corp. and U.S. general contractor Kiewit Energy Co. have jointly landed a deal to construct a large facility to liquefy natural gas in Maryland for completion in 2017. The facility will have an annual liquefaction capacity of about 5.25 million tons, according to IHI.

Hitachi Zosen Corp. is redoubling efforts to increase sales of equipment for producing gas oil and naphtha from natural gas, while Mitsui Engineering & Shipbuilding Co. is speeding up work to receive orders for LNG tankers that emit less carbon dioxide than conventional tankers.

The U.S. government is weighing lifting its ban on shale gas exports to countries it doesn’t have free-trade agreements with. Japan does not have an FTA with the United States.

Shale gas is also believed to be abundant in China and South American countries.

Motegi views shale site

PITTSBURGH
JIJI

Minister of Economy, Trade and Industry Toshimitsu Motegi inspected a shale gas production site near Pittsburgh during his recent visit to the United States, where he called for Washington to approve exports of natural gas to Japan at an early date.

Following the inspection Saturday, Motegi told reporters, “I have come to realize that shale gas could be a promising energy for Japan, which is trying to diversify energy sources and reduce costs related to energy procurement.”

The site inspected by Motegi is part of the Marcellus Shale Field, the biggest shale gas field in the United States and one of the biggest in the world. Shale gas is a type of natural gas.

Sumitomo Corp. and Rex Energy Corp. of the U.S. are jointly developing the field, which straddles the states of West Virginia, Ohio, New York and Pennsylvania.

Sumitomo has a 30 percent stake. It is in charge of developing a 28,320-hectare portion and is planning to dig more than 1,000 wells over 15 years.

Natural gas production volume at the field as a whole now stands at 70 million tons a year and is being expanded at an annual pace of 10 million tons.

“In two years, production at the field will reach the equivalent of Japan’s annual natural gas imports, and this is marvelous,” Motegi said.