Japan weighs LNG options — U.S. versus Canadian sources

On October 12, 2013, Japan’s NHK News reported that Japan and Canada reached agreement for the two nations to work together toward launching exports of Canadian shale gas to Japan. The article goes on to weigh the pros and cons of Canadian gas imports in relation to those from the U.S., providing some clear insights as to the thought processes behind Japan’s moves to source lower-cost supplies as it ramps up natural gas consumption, particularly for use in electricity generation.

The article initially touches on three advantages of Japan importing natural gas from Canada rather than the U.S.

1. Free Trade Agreement requirements of the U.S. government: Whereas Canada offers relatively straightforward procedures for LNG imports, the U.S. would require DOE approval for each import arrangement because Japan has not signed an FTA with the U.S.
2. Relative costs of importing LNG: Canada would offer cost benefits in that fuel could be shipped from Canada in roughly half the time, given that Canadian exports would be sent from the Pacific Ocean while those from the U.S would likely be shipped from the Gulf of Mexico, via the Panama Canal.
3. Natural gas liquefaction costs: Canada could offer lower costs for liquefying natural gas supplies before shipment given the nation's cooler climate in comparison to that of the Southern states.

Several disadvantages of Japan importing natural gas from Canada rather than the U.S. are also mentioned.

1. Natural gas export infrastructure: Canada lacks experience exporting natural gas beyond the U.S. Consequently, whereas companies from the U.S. are able to export the fuel drawing on an established pipeline network, Canadian exports would require a great deal of investment toward building liquefaction plants.
2. Workforce: Canada poses challenges in terms of securing a sizeable enough workforce to pursue natural gas development now on the drawing board, particularly given low population levels at rural sites.
3. Pipeline infrastructure: Pipelines would need to be laid from remote Canadian drilling sites to export terminals on the Pacific coast. Here, construction costs would be high and environmental concerns would be an issue given that any such network would need to cross the Rocky Mountains.

Source article: カナダと連携 シェールガス日本に輸出へ

Related article: Japan, Canada agree on shale gas cooperation

The details provided on this website are for general informational purposes only, and accordingly posting of this material does not imply endorsement by the author or any of the individuals or companies mentioned. 

To inquire about Japanese to English translation services regarding this content and other related materials, contact David Hathaway of Hathaway Translation Services at: