Veresen talking to Japanese buyers for Jordan Cove LNG

Fri Nov 7, 2014 3:12am EST
 
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By Aaron Sheldrick

TOKYO Nov 7 (Reuters) - Canadian pipeline company Veresen Inc is talking to Japanese buyers for offtake from its Jordan Cove liquefied natural gas (LNG) facility in Oregon and expects to make a final investment decision for the project by the middle of next year.

The project is one of a number of planned LNG terminals being built to ship surging production from shale formations to Asia's energy hungry markets.

Veresen expects to be able to ship LNG from the U.S. West Coast to Tokyo Bay for $11 per million British thermal units, Chief Executive Officer Don Althoff told Reuters in an interview at an LNG conference in the Japanese capital on Thursday.

Initial capacity is slated to be six million tonnes of LNG, with shipments expected to start by 2019.

That price would make the gas almost 30 percent cheaper than the average price of LNG imports to Japan in September, at $15.54 per mmBtu. A shipment of gas from Alaska to Japan in September cost $16.00 per mmBtu on a customs-cleared basis.

"We are focused on one country at the moment more than any others," Althoff said. "I'm not actually talking to anybody in India. I'm not actually talking to anybody in Indonesia... I'm in Japan.

"We have signed six heads of agreement ... for about three times the volume of the plant's capacity," he added. "We have been at it now with this set of buyers for about 12 months."

Heads of agreements are preliminary contracts that can be confirmed when full approvals are received and final investment decisions made on a project.   Continued...