Korea Gas Takes Stake in Canadian Shale Gas Play

The world’s biggest liquefied natural gas purchaser is buying into a Canadian shale gas play.

Korea Gas Corp. is acquiring a five per cent stake of the Cordova Embayment project in northeastern British Columbia from Mitsubishi Corp.

KOGAS becomes the latest participant in the Cordova Embayment, which has reserves of 5-8 trillion cubic feet of gas, amounting to 100-160 million tons of LNG equivalent.

In May, Mitsubishi transferred 22.5 per cent of its stake in the project to Chubu Electric, Tokyo Gas and Osaka Gas, each partner receiving an equal 7.5 per cent. A subsidiary of Japan Oil, Gas and Metals National Corp. also gained a 7.5 per cent share.

Cordova Embayment operator Penn West Energy originally entered into a $850-million partnership deal with Mitsubishi in August 2010.

Mitsubishi said the firm expects production from the play to amount to about 500 million cubic feet per day, equivalent to 3.5 million tons of LNG per year by 2014.