Canada, Japan Strengthen Trade Ties with Energy Deal

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

Canada's prime minister continues to expand his trade-diversification efforts. Energy-hungry Japan imports LNG, but its grid may be changing.

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Carney Makes First Official Visit to Tokyo

In his first official visit to Tokyo, Canadian Prime Minister Mark Carney announced he was building on decades of strong trade ties with Japan to include clean energy and liquefied natural gas (LNG).

Carney is on a visit to Japan after wrapping up a tour of Australia, where he brokered similar trade arrangements. Since U.S. President Donald Trump unleashed a barrage of tariffs last year, bilateral relations have soured considerably, prompting Carney to look for alternative trading partners.

In a joint statement with Japanese Prime Minister Sanae Takaichi, the first woman to hold the high office in Japan, both sides said they were committed to an expanded energy relationship.

Both sides are eager to expand "bilateral trade and cooperation on energy projects, including liquified natural gas and liquified petroleum gas, recognizing their important roles in energy security and the energy transition," their statement read.

Japan already enjoys a strong trading relationship with Canada. Carney's office said that Japan's is the fourth-largest economy in the world, while Canada ranks fourth in foreign direct investment.

"In a more dangerous and uncertain world, strengthening this relationship presents enormous opportunities for greater security, stability and prosperity for both our peoples," the joint statement read.

By the Numbers

• 1.3 MTPA in North American LNG for Japan
• 50 cargos from newly-started LNG Canada

Japan Keen on Gas, For Now

Japan already is slated for LNG deliveries from Canada. Canada is the fifth-largest natural gas producer in the world, churning out close to 20 billion cubic feet per day (Bcf/d). As of now, the LNG Canada facility in Kitimat is the only operational facility in Canada capable of delivering the super-cooled gas outside of North America, helping with Canadian efforts to diversify its trade.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Plant Database can learn more about LNG Canada--including capacities, investment values and necessary equipment--in a detailed plant profile.

LNG Canada, backed primarily by Shell, recently delivered its 50th cargo, after it was brought online only last year. The facility features two trains, or liquefaction units, that together can produce up to 14 million metric tons per annum (MTPA) of gas in the liquid form. It reached 25 cargos by November, shortly before it started operations from its second train.

The race to build up LNG facilities along the Pacific Coast of North America is picking up, with a handful of other plants slated for British Columbia. An 800-mile natural gas pipeline, meanwhile, is necessary before the U.S. can begin to realize its own LNG ambitions with a facility in Alaska.

With few natural resources of its own, Japan has relied heavily on foreign supplies for fossil fuels. In January, the U.S. subsidiary of Japanese power company JERA bought into the Haynesville Shale in western Louisiana. JERA also has an offtake agreement to secure supplies from the as-yet-built Cameron LNG facility slated for Louisiana.

But Japan's appetite could be changing. Parts of the Kashiwazaki-Kariwa Nuclear Power Station were turned on in February, sending nuclear power to the grid for the first time since the Fukushima-Daiichi meltdown in 2011.

Analysis from the Energy Information Administration, the data cruncher for the U.S. Department of Energy, said the return of nuclear power in Japan could displace as much as 1.3 MTPA of LNG.

Key Takeaways

• Canada's trade diversification spree continues
• Japan's appetite may be changing with the restart of nuclear programs

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).