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Japanese consortium considering import of shale gas from BC

As Japan enters a long, hot summer with not enough electric power to run its air conditioners, a Japanese consortium is talking with Canada's Penn West about building a liquid natural gas (LNG) plant on the northern B.C. coast. The plant, fed by shale gas from northeastern B.C., could supply over 10 per cent of Japan's LNG imports.

A report on the plan was published on July 9 in the Japanese daily Yomiuri Shimbun:

A Japanese consortium including Mitsubishi Corp. has begun talks with a major Canadian energy company to jointly build a large plant on Canada's Pacific coast to export shale gas to Japan. It would be the first time for shale gas produced in Canada to be exported to Japan.

According to sources, the Japanese consortium and Canada's Penn West Exploration aim at producing 10 million tons of shale gas, more than 10 percent of Japan's annual imports of liquefied natural gas.

This will allow Japan to diversify its procurement of LNG, demand for which is surging as an alternative to nuclear-based energy.

Shale gas will be extracted in an inland area of British Columbia, in northwestern Canada, and transported about 1,000 kilometers via pipeline to the country's Pacific coast. The gas will be liquefied at a plant on the coast before it is exported to Japan.

Facilities to extract the gas are expected to cost about 400 billion yen [CDN$4.774 billion] and construction of the liquefaction plant is expected to cost as much as about 1 trillion yen [CDN$11.929 billion].

The Japanese consortium and Penn West Exploration aim to start shipping the liquefied shale gas to Japan and other countries in the late 2010s, the sources said.

Nothing about the plan has yet appeared on the Penn West Exploration website, which was last updated on July 5.

The Tyee has recently reported on shale gas here, here, and here.

Crawford Kilian is a contributing editor of The Tyee.

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