LNG shipments from British Columbia to Japan approaching

Idemitsu Kosan Co., Japan’s second-largest oil refiner, is likely to begin importing liquefied natural gas (LNG) to the country in 2018, an official of the government-run Japan Oil, Gas and Metals National Corporation (JOGMEC) said in an open seminar in Tokyo on November 19.

Takashi Yamada, general manager of JOGMEC’s Vancouver office, said that there are about 20 LNG projects in Canada’s West Coast, adding that the country’s natural gas reserves amount to an estimated 600 trillion cubic feet.

Idemitsu has a one-third stake in the Douglas Channel LNG Consortium. Other members are Calgary, Alberta-based AltaGas Ltd., EDF Trading Ltd. (a subsidiary of Electricite de France) and Belgium-based LNG shipper EXMAR NV.

Both Yamada and the Calgary Herald newspaper (January 28, 2015) reported that the consortium expects to make a final investment decision (FID) in fourth quarter of 2015. That would pave the way to first exports in 2018 from the consortium’s offshore barge-based (floating) liquefaction plant, which EXMAR will construct in Douglas Channel, near Kitimat. The plant’s initial capacity would be rated at 550,000 metric tons a year, the newspaper said.

Canada’s new Prime Minister Justin Trudeau in a statement welcomed Japanese investment in LNG projects in his nation, Yamada said.

Trudeau and his cabinet were in office for just two days when President Barack Obama rejected the proposed Keystone XL pipeline. That project would duplicate the existing Keystone Phase I pipeline with a shorter 1,899-kilometer route to link Hardisty, Alberta and Steele, Nebraska for exporting heavy oil from tar sands.

Trudeau “will have to come up with a new way of exporting oil without breaking his promise to be a much greener prime minister than his Conservative predecessor,” The Economist said (November 14, 2015).

The British “newspaper” also said; “Mr Obama did the new prime minister a favor by quashing Keystone XL so early in his term, relieving him of any blame for the decision. The rejection will also help Mr Trudeau to persuade provincial premiers that Canada needs a national plan to cut carbon emission if it is not to face discrimination from importers.”

LNG produces a smaller amount of carbon dioxide than oil when it is burned.

An advantage of Canadian LNG for Japan includes a short transportation period: about eight days compared with 18 days that are required to carry crude oil from the Middle East, Yamada pointed out.

By Shota Ushio, freelance writer based in Tokyo

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