Japex takes financial hit following PNW LNG scrapping
Japan Petroleum Exploration (Japex) will take a $82 million hit following the scrapping of the Pacific NorthWest LNG project in British Columbia, Canada.
Japex’s losses include the extraordinary loss of termination of approximately 900-km pipeline construction plan estimated at approximately $52.2 million and the non-operating expense as the equity method investment loss of PNW LNG estimated at approximately$29.7 million.
The company participated in the Pacific NorthWest LNG project since 2013 for the purpose of producing LNG from its shale gas reserves in North Montney in British Columbia, Canada, in order to secure long-term supply of LNG to the domestic market through the Soma LNG import terminal.
However, Japex noted in its statement that, due to the dramatic change in the LNG industry, the company decided not to take further participation in the project.
The construction of the Soma LNG terminal continues as planned and is scheduled to commence operation from March 2018, Japex said.
“Considering the current circumstances in the LNG market, we believe that multiple alternative sources of supply are available for the procurement of LNG for the time being,” the statement reads.
Speaking of its North Montney shale project, Japex said it is producing natural gas at the rate of approximately 500 million cubic feet per day.
Japex further added that together with JML and other partners it is looking to explore all options to maximise the value of the project and will continue developing the gas assets.