Japan backs new shale program with US$10.75 billion

The Japanese government will give guarantees for projects that generate shale gas and other lower-cost energy supplies.

Under the plan, the state-run Japan Oil, Gas and Metals National Corp (JOGMEC) will expand its loan guarantee program for energy businesses. JOGMEC'S guarantee cap will increase to 75% from 50%. The guarantee fee will drop by a 0.1 percentage point from the current rate of 0.8%.

The new loan program will give preferential treatment to U.S. shale gas projects. The loan program will also accommodate gas projects in Russia, Australia and Africa, however.

The first to benefit from the program will likely be U.S. shale gas projects planned by three groups: an alliance of Osaka Gas Company and Chubu Electric Power Company; a partnership between Mitsui & Co Ltd and Mitsubishi Corporation and a coalition consisting of Sumitomo Corp and Tokyo Gas Company.