Japan`s JGC and two American engineering groups have agreed to build a liquefied natural gas terminal in the U.S state of Oregon. providing the first export base on the West Coast for Asia-bound LNG.
JGC will join U.S. builders Kiewit and Black &. Veatch on the project. thought to be worth between $5 billion and $6 billion. The Japanese company`s portion is expected to come to nearly 200 billion yen ($1.76 billion). Canadian energy group Veresen is the owner and developer of the project.
Construction will begin once Veresen makes a final investment decision on the plant. which will have an annual output capacity of 7.8 million tons. Plans call for starting LNG production in 2024.
Shipments to East Asia will take eight days. compared with the 20 it takes from the Gulf of Mexico via the Panama Canal. Jera — a joint fuel supply venture of Japanese utilities Tokyo Electric Power Co. Holdings and Chubu Electric Power has a basic agreement to buy an annual 1.5 million tons of LNG output. as has Tokyo-based trading house Itochu.
U.S. natural gas production took off as a result of the so-called shale revolution. which unlocked vast new supplies of hydrocarbons. Prices of the fuel began plunging in 2014. discouraging investment in major LNG terminals.
But the LNG market is expected to tighten in the mid-2020s on greater demand from China and India. which seek to limit their greenhouse gas emissions. Some energy sector watchers are predicting a flurry of LNG terminal projects between now and 2019.