Japan to Guarantee Loan for Development of Canadian Shale Gas Resources

Japan Oil, Gas and Metals National Corporation (JOGMEC) has signed loan guarantee agreements for the development and production of shale gas resources in North Montney area of British Columbia, Canada.

In a statement published Monday, JOGMEC said it has signed the loan guarantee agreements on 30th March, 2015, to support JAPEX Montney Ltd. (JML), a Canadian subsidiary of Japan Petroleum Exploration Co., Ltd. (JAPEX), in development of Canadian shale gas resources.

JOGMEC’s guarantee will cover up to $375 million financed by Mizuho Bank Ltd., Tokyo-Mitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corporation corresponding to 50 percent of a total of $750 million loan which will be co-financed with Japan Bank for International Cooperation to JML.

In April 2013, JML acquired a 10 percent interest from Progress Energy Canada Ltd., a fully owned subsidiary of Malaysia's Petronas, regarding the shale gas development and production project in North Montney area and from Pacific NorthWest LNG Ltd., which is also a subsidiary of the Malaysian firm, regarding a planned LNG project (PNW LNG) in British Columbia.

Since March 2013, JOGMEC has been supporting the upstream project through equity financing to JML.