Plan for shale gas exports from B.C.
July 9,2010, Yomiuri Shimbun, Japan
The global volume of natural gas resources was previously estimated as enough to meet worldwide demand for the next 60 years, but shale gas reserves will likely increase that number to 160 years.
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.
Shale gas is a natural gas contained in rock known as shale. Production of shale gas has recently been increasing sharply in North America.
The Japanese consortium comprises Mitsubishi, Tokyo Gas Co., Osaka Gas Co., Chubu Electric Power Co. and Japan Oil, Gas and Metals National Corporation. 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 and construction of the liquefaction plant is expected to cost as much as about 1 trillion yen.
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. The envisioned LNG plant would be almost as large as Russia's Sakhalin-2 oil and gas project, the largest undertaking Japan is currently involved in.
Penn West Exploration has a 50 percent interest in a gas field in British Columbia, while the Japanese consortium holds 45 percent and Korea Gas Corporation 5 percent. It was once difficult to extract gas from shale rock, but technological advances have made it economically viable.