Japan Petroleum Exploration Co. Ltd. (Japex) has awarded Nippon Steel Corp. a contract to build the country's first LNG plant.
Japex has agreed to provide domestically processed liquefied natural gas to Asahikawa Gas Co., a local distributor in Hokkaido, Japan. AGC currently uses LPG.
Japex produces gas from the Yufutsu oil and gas field in southern Hokkaido. That field is 120 miles from Asahikawa's facilities, which are too remote and have too limited demand to support a pipeline, said a Japex spokesman.
Yufutsu is expected to produce 40 MMcfd of gas by 2005, up from the current 10 MMcfd. Natural gas from the field is delivered to customers in Tomakomai, Chitose, and Sapporo areas through a 45-mile pipeline.
Japex decided a small LNG plant at the Yufutsu field and delivery via existing railway would be the best solution. Japex had used a similar method to supply imported LNG to remote customers in Honshu (OGJ, Aug. 21, 2000, p.48).
The company will begin building the 150 tonne/day plant in April 2001. First deliveries to AGC will begin in early 2003.
There are 15 local distribution companies in Hokkaido, isolated from each other, each with limited demand.
Japex is targeting six areas in Hokkaido, including Hakodate (160 miles from Yufutsu field), Muroran (50 miles), and Obihiro (120 miles) for expansion, depending on demand growth.