Japex starts on Soma LNG import terminal
Japanese upstream developer Japex has started building its first domestic LNG import terminal that will receive imports from the planned Pacific Northwest LNG export project in Canada that it has a 10pc stake in.
Japex yesterday began working on the ¥60bn ($522mn) project at Soma in Fukushima prefecture on the north Pacific coast, which is scheduled for a March 2018 start-up. The company earlier this month also announced its plan to develop a 1,200MW combined-cycle gas turbine power generation plant near the terminal to tap Japan’s deregulating retail power market.
Soma will enhance Japex’s LNG and regasified gas distribution logistics by connecting via a new 40km pipeline link to the Niigata-Sendai gas pipeline running across northern Japan. The company operates a satellite LNG terminal at Yufutsu in northern Japan’s Hokkaido to liquefy natural gas produced at its inland Yufutsu gas field for deliveries on tanker trucks and railcars.
Japex plans to take delivery at Soma of 1.2mn t/yr of LNG from Malaysian state-owned Petronas’ planned 12mn t/yr Pacific Northwest LNG export project on Canada’s west coast, with first shipment expected at the end of 2018. The LNG will then also shipped to the Yufutsu satellite terminal on coastal tankers to meet demand on Hokkaido island. The Soma LNG terminal will be initially installed with a 230,000 kl (93,150t) LNG storage tank but have enough space for storage capacity expansion.
Soma adds to four new LNG terminals under construction in Japan for planned start-ups by April 2019. The latest terminal was commissioned this week by regional gas retailer Saibu Gas at Hibiki in northern Kyushu island, bringing up the number of the country’s operating LNG import terminals to 33. The expectation of increasing LNG arrivals, particularly from North America after 2017, have also led the government to work on new guidelines and draft legislation to allow development of floating LNG terminals in Japanese waters.
Japex last week reported a ¥19bn profit for the first half of the 2014-15 fiscal year ending 31 March, up 19pc from a year earlier. The company’s upstream output surged more than 80pc on year to 59,000 b/d of oil equivalent during the first half as crude output picked up at the Gharraf oil field in Iraq.
Gharraf began oil output in September last year at 35,000 b/d and has since risen to around 83,000 b/d. It is targeting 230,000 b/d in 2017. The oil field is operated and 45pc owned by Petronas, 30pc by Japex and the remaining 25pc by the Iraqi state.