Japan and Canada agreed Sunday to cooperate on developing energy resources, including natural gas, and minerals in the North American country, the Japanese Ministry of Foreign Affairs said.
The agreement was reached during a meeting between Japanese Prime Minister Yoshihiko Noda and his Canadian counterpart Stephen Harper in Tokyo.
In a joint statement issued following the meeting, both leaders recognized the importance of accelerating efforts to facilitate cooperation between the private sectors of the two countries including in the trade of natural gas and continuing collaboration on research and technology in these sectors.
The two leaders also welcomed increased investment and business interest from Japanese companies in Canada's energy and mineral resources sector, and highlighted the great potential to further expand trade and investment to ensure stable supply of such resources through market mechanisms.
The meeting took place at a time when there is growing interest in Japan on importing shale-gas based LNG from Canada as a means to diversify its supply.
The meeting is also timely as it follows an unconventional gas seminar in Tokyo March 22 hosted by the Alberta government, which attracted more than 200 delegates from both the private and the public sectors.
Japanese LNG buyers are weighing the option of importing shale-gas based LNG from Canada and are hoping to import it on a pricing basis linked to Henry Hub or other gas benchmarks, instead of the more traditional -- and generally so far more expensive -- oil benchmarks such as the Japan Customs Cleared crude oil price, according to industry sources.
For Japanese buyers, Canadian LNG supplies are also attractive as the supply would come from a country with no so-called geopolitical risks and a shorter voyage time from British Columbia compared with th Middle East, industry sources said.
Voyages between Kitimat and Tokyo Bay are about 9-10 days, while it takes some 20 days from the Middle East to Japan.
