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AltaGas and Idemitsu to export LNG and LPG from Canada to Asia

AltaGas and Idemitsu to build LNG facility on BC coast

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolAltaGas Ltd (AltaGas) from Alberta in Canada and the Japanese Idemitsu Kosan Corporation Ltd (Idemitsu) have decided to form the 50/50 AltaGas Idemitsu Joint Venture Limited Partnership joint venture to export liquefied natural gas (LNG) and liquefied Petroleum Gas (LPG) from Canada to Asia.

Since USA cannot offer anymore opportunities to Canada gas export with the development of the abundant shale gas, both countries entered direct competition to find alternative consumers markets.

For one year, USA and Canada rivals of announcements related to new export LNG projects.

In USA, the natural gas produced from shale is easy to transport through the existing infrastructure of pipelines to the main export LNG projects planned around the Gulf of Mexico.

But then there is a long way to go for the LNG carriers to Asia even if the Panama Channel is going to accept larger tankers.

AltaGas-LNG_Idemitsu_Project_MapIn Canada, the distances to the main offshore markets, such as Japan and South Korea, are much shorter, but the challenge is onshore to gather the gas and condensate, treat them and transport them to the East Coast in British Columbia (BC) and to convert them into LNG and LPG ready for shipment.

Based in Calgary, Alberta, AltaGas is precisely one of the key player in Canada for liquid rich gas processing, power generation and utilities in Alberta and British Columbia with six extraction plants, five natural gas transmission systems, more than 70 gathering and processing facilities, three NGL pipelines, and a 6,500 km network of gathering and sales lines.

Among this network of pipelines, AltaGas owns and operates the pipeline system to supply Kitimat and Prince Rupert on the west coast.

In addition AltaGas maintains an integrated engineering department in order to adjust permanently its assets to natural gas supply opportunities and market demand.

On its side Idemitsu established a regional market leadership in north-east Asia for refining and marketing oil, gas and petrochemical products.

Idemitsu is also one of the key stakeholders of Astamos Energy Corporation, the global market leader for LPG marketing and distribution.

AltaGas LNG to use same pipeline as BC LNG project

Through their joint venture, AltaGas and Idemitsu are planning to build a:

 – Natural gas pipeline to the west coast

 – LNG export facility near Kitimat in British Columbia with a capacity of 2 million t/y

 – LPG refrigeration units, tank farm and export terminal with a capacity of 700,000 t/y

Because of the differences of processes, modes of transportation and environmental impact, the LNG facility project and the LPG export projects will be handled separately.

AltaGas-LNG_Idemitsu_ProjectFor the LPG refrigeration unit and tank farm, AltaGas is planning to complete the feasibility study by the end of 2013 with construction to start in following and first shipment to be loaded in 2016.

Regarding the LNG export facility, the feasibility study is expected to be completed one year later, in 2014, and will depend on the construction of the gas pipeline to supply the natural gas.

In respect with all the required regulatory approvals and permits, AltaGas and Idemitsu are planning the first LNG carrier to depart to Asia in 2017.

AltaGas LNG project should use the same pipeline for gas supply as the BC LNG project to be developed as a cooperative with First Nations to come on stream in 2015.

This pipeline is to be built by Pacific Northern Gas Ltd, an AltaGas wholly owned subsidiary

The LPG should be transported by rail from Edmonton to the West coast.

In addition to this AltaGas LNG project, AltaGas and Idemitsu intend to use their partnership to investigate all other opportunities to gather natural gas and condensate source of supply in North America and to export it to Northeast Asia.

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