29 January 2013

AltaGas, Idemitsu Kosan sign agreement to form JV

Canada-based AltaGas and Japan’s Idemitsu Kosan have signed an agreement to form a joint venture (JV) company called AltaGas Idemitsu joint venture limited partnership.

The JV, in which each company will own a 50% interest, will allow export of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from Canada to Asia.

The new company will develop long-term natural gas supply and sales arrangements to meet the growing demand for natural gas in Asia.

Under the agreement, Japan will benefit from a new, clean, stable and reliable source of LNG from Canada and will help the country to meet its growing demand for natural gas.

The JV company will conduct feasibility studies to develop and construct liquefaction facilities, as part of the proposed project to export LNG to markets in Asia, which is expected to complete in the beginning of 2014.

AltaGas chairman and CEO David Cornhill said Idemitsu is a global leader which supplies energy, petroleum, lubricants and petrochemical products and services to Japan.

"We are pleased to work with Idemitsu to develop opportunities that will be good for the people of Japan and Canada," added Cornhill.
Idemitsu Kosan president Kazuhisa Nakano said that the joint venture is expected to enhance business of both the companies, as well as contribute to the national interests of both Canada and Japan.

The pipeline capacity, which is required to supply natural gas to the liquefaction facility, is expected to be provided by AltaGas’ wholly-owned affiliate Pacific Northern Gas.

Construction of the proposed LNG exports is expected to begin in 2017 and is subject to consultations with First Nations, plus completion of the feasibility study, regulatory approvals and facility construction.

As a part of the partnership, both the companies will develop a LPG export business, which will include logistics, plant refrigeration and storage facilities.

The JV company will evaluate additional opportunities to own and operate infrastructure assets of other energy businesses in North America.

Image: AltaGas and Idemitsu Kosan have signed an agreement to form AltaGas Idemitsu joint venture limited partnership company. Photo: courtesy of Uploader.