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JOGMEC guarantees loan for B.C. shale development

LNG Industry,

JOGMEC has signed loan agreements to support JAPEX Montney Ltd (JML), a Canadian subsidiary of Japan Petroleum Exploration Co. Ltd (JAPEX), for the development and production of shale gas resources in North Montney area of British Columbia (B.C.), Canada.

The guarantee will cover up to US$375 million financed by Mizuho Bank Ltd, Tokyo-Mitsubishi UFJ Ltd and Sumitomo Mitsui Banking Corp. corresponding to 50% of a total of US$750 million loan which will be co-financed with Japan Bank for International Cooperation (JBIC) to JML.

In April 2013, JML acquired a 10% interest from Progress Energy Canada Ltd, a subsidiary of Petronas, regarding the shale gas development and production project in North Montney area and from Pacific NorthWest LNG, regarding a planned LNG project in British Columbia.

Since March 2013, JOGMEC has been supporting the upstream project through equity financing to JML.

Shale gas production from the upstream project is to be exported to Japan as LNG through the Pacific Northwest LNG project. It is anticipated that the entire project would contribute to diversify gas supply sources and, consequently, to reinforce Japan’s energy security.

Adapted from press release by Katie Woodward

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