Calgary-based AltaGas Ltd. and Japan’s Idemitsu Kosan Co. Ltd. have formed a joint venture to pursue deals to export liquefied Canadian gas to Asian markets, including the development of natural gas liquefaction facilities.

The AltaGas Idemitsu Joint Venture Limited Partnership would develop long-term gas supply and sales arrangements to serve Asian markets, particularly Japan.

“Canada is one of the world’s most resource-rich countries and has proven to be a very promising new supplier of gas to Japan,” said Idemitsu Kosan President Kazuhisa Nakano. “The partnership with AltaGas is a natural fit with Idemitsu’s gas and power business. AltaGas is simply the best strategic partner for us in terms of both existing business and potential opportunities…”

As Asia’s largest liquefied natural gas (LNG) consumer, Japan would benefit from a “new and dependable” source of LNG from the partnership, the companies said.

The partnership is to study the feasibility of constructing natural gas liquefaction facilities as part of its plans. A feasibility study is expected to be completed by early 2014. The pipeline capacity required to transport gas to the liquefaction facility is expected to be provided by AltaGas wholly owned subsidiary Pacific Northern Gas Ltd. (see Daily GPI, Nov. 1, 2011). Subject to consultations with First Nations, and the completion of the feasibility study, permitting, regulatory approvals and facility construction, the proposed LNG exports could begin as early as 2017.

Multiple projects have been proposed to export LNG from western Canada to serve Asian markets (see Daily GPI, Jan. 28). However, the viability of projects has been called into question due to costs and the growing preference of Asian buyers to secure gas supplies under contract terms that are not linked to oil prices (see Daily GPI, Oct. 31, 2012). Last week, the smallest proposed project in the lineup to export LNG from western Canada postponed its original startup date by two years (see Daily GPI, Jan. 23).

On Tuesday, the AltaGas Idemitsu partnership said it also plans to pursue opportunities to develop a liquid propane gas (LPG) export business, including logistics, plant refrigeration and storage facilities. A feasibility study for this project is expected to be completed this year. Idemitsu is a shareholder of Astomos Energy Corp., one of the world’s largest LPG suppliers. Subject to consultations with First Nations and the completion of the feasibility study, permitting, regulatory approvals and facility construction, the proposed LPG export business could begin as early as 2016, the companies said.

Other opportunities to own and operate energy infrastructure in North America to serve Asian markets will be evaluated, the companies said. The partners will each old a 50% stake in the venture.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.