Tokyo Gas sale and purchase of liquefied natural gas and the participation in the Queensland Curtis LNG project

abarrelfullabarrelfull wrote on 07 Mar 2011 06:44
Tags: australia bg-group lng tokyo-gas

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Tokyo Gas Co., Ltd. (“Tokyo Gas”, Mr. Tsuyoshi Okamoto, President) and BG Group plc (“BG Group”) signed agreements today regarding the participation in, and purchase of liquefied natural gas (LNG) from, the Queensland Curtis LNG Project (“QCLNG”), which BG Group is promoting in the state of Queensland. Tokyo Gas will become a foundation buyer from QCLNG.

QCLNG involves the development of coal seam gas fields in southern and central Queensland and transportation of the gas through an underground pipeline network to Curtis Island near Gladstone, where it will be liquefied for export. Since signing the Heads of Agreement in March 2010 Tokyo Gas, as a foundation buyer, has been progressing the QCLNG sales agreements with BG Group and reached definitive agreements today, making Tokyo Gas the first Japanese utility to purchase LNG produced from unconventional gas. Tokyo Gas will be supplied with LNG from QCLNG and also from the BG Group’s global LNG portfolio*1, which will bring stable, flexible and competitive supply of LNG to the company.

Coal seam gas (CSG) is one of the unconventional natural gas sources such as shale gas and tight-sand gas. Although it has been difficult to produce gas from unconventional sources, recent technical breakthrough has made drastic increase in such gas production possible. Total resource of CSG, shale, and tight-sand gas is reported to be around 920 trillion cubic meters*2 widely distributed around the world. The Reserve/Production ratio of natural gas is around 63 years based on current proved reserve of conventional gas (around 187 trillion cubic meters) and world production rate (around 3 trillion cubic meters) *3. Unconventional gas has huge potential to increase this R/P ratio and contribute to secure stable supply of natural gas.

Tokyo Gas will contribute to launch this CSG-LNG project and increase LNG supply capacity by participating as a foundation buyer and will explore opportunities to receive LNG from various other sources. The company will continue to secure stable supply of LNG with competitive terms and develop its business in the LNG value chain.

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