AltaGas Ltd. (TSX:ALA) and Japanese energy company Idemitsu Kosan Co. Ltd. have formed a 50-50 joint venture with plans that include another liquefied natural gas plant on the B.C. coast.
The new joint venture, AltaGas Idemitsu, was formed to supply both liquefied petroleum gas and liquefied natural gas (LNG) to Idemitsu Kosan.
Idemitsu Kosan is a shareholder of Astomos Energy Corporation, one of the world's largest LPG suppliers.
"We are excited to partner with Idemitsu, a global leader in the supply of energy, petroleum, lubricants and petrochemical products and services to the people of Japan," said AltaGas CEO David Cornhill.
AltaGas did not say whether the LNG plant it is considering would be built in Kitimat or Prince Rupert, only that the gas would come from AltaGas's subsidiary, Pacific Northern Gas Ltd., which has a natural gas pipeline running to both Kitimat and Prince Rupert.
BC LNG plans to get its gas for an LNG plant in Kitimat from excess capacity on the Pacific Northern Gas (PNG) pipeline.
But BC LNG managing director Tom Tatham told Business in Vancouver that he doesn't expect the AltaGas Idemitsu project would have a negative impact on his proposal, which is a joint venture between the Haisla First Nation and the American firm Douglas Channel Gas Services. In fact, it is likely to help with plans to expand the pipeline's capacity, he said.
"We've been in discussion with PNG about expanding their pipeline, and what they have told us is that they can expand it beyond the service request that we made to provide for their parent company's project," Tatham said.
"That should result in two things – more certainty of their being able to finance the expansion and also a lower tariff than if they just did a smaller expansion, as we requested."
The new joint-venture plans to complete a feasibility study by the end of 2014. The AltaGas Idemitsu proposal is the sixth LNG plant to be proposed for the B.C. coast.
• BC LNG, Kitimat;
• LNG Canada (Shell), Kitimat;
• Kitimat LNG (Apache, Chevron), Kitimat;
• BG Group LNG project, Prince Rupert;
• Pacific Northwest LNG (Progress Energy-Petronas), Prince Rupert.