Alaska Governor Bill Walker signed the agreement with Sinopec, Bank of China and China Investment Corp. to advance a natural gas pipeline project. There's no guarantee a pipeline will be built, but the agreement has given new life to a project Alaskans have wanted for decades to offset declining oil production from the North Slope.
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The state of Alaska took a major step toward realising the long-sought pipeline to move natural gas from the North Slope to Asia, siding with interests from China after major oil companies stepped back from the project.
"This is the market responding, and we're very, very pleased with that," Walker told reporters in a teleconference from Beijing.
Alaska Gasline Development Corporation (AGDC), the State of Alaska, Sinopec, China Investment Corp and the Bank of China signed the agreement to advance LNG in Alaska. The agreement will involve investment of up to US$43 billion, create up to 12 000 US jobs during construction, reduce the trade deficit between the US and Asia by US$10 billion/yr, and give China clean energy.
The agreement was signed as both US President Donald Trump and Chinese President Xi Jinping watched. No financial terms were released.
The agreement means all parties will work on various aspects of the project, including marketing and financing with a status check in 2018. The goal, Walker said, is to have definitive contracts signed by the end of 2018.
AGDC is building a gas treatment plant, an 800 mile (1287 km) pipeline to south central Alaska for in-state use, and a liquefaction plant in Nikiski to produce up to 20 million tpy of LNG for export.
China, the world's third-largest gas buyer, is importing more LNG as the government tries to wean the country off dirty coal as part of its push to clear the skies, while the US wants to sell more of its excess gas abroad.
The China Investment Corp. (CIC) is the nation's sovereign wealth fund, similar in structure to Alaska's Permanent Fund. In a statement, CIC described itself as "an experienced financial investor in the energy and infrastructure sectors (which) has long been interested in investing in American LNG infrastructure," wrote the firm, which has US$813.5 billion in investments. "CIC Capital is pleased to work with fellow industry and financial partners on this project."
Sinopec, one of the largest oil and gas firms in the world based on revenue, said its interest is the opportunity to purchase a stable flow of gas from Alaska.
The Bank of China added, “As the most internationalised bank in China, Bank of China is willing to facilitate the China-US energy co-operation and provide financial solutions for this transaction by taking advantage of its vast experiences and expertise in international mega-project financing.”
China would receive 75% of the natural gas from Alaska's North Slope if a pipeline is built under the agreement.
Alaska would retain the remaining 25 % to sell to regional markets in Asia, like Japan, South Korea and Vietnam.
Read the article online at: https://www.worldpipelines.com/project-news/09112017/alaska-looks-to-china-for-pipeline-development/