ALASKA and China have signed an historic joint development agreement for the Alaska LNG project, the US state’s strategic gas infrastructure project.
The deal was signed by Alaska Gasline Development Corporation (AGDC), the State of Alaska, China Petrochemical Corporation (Sinopec), CIC Capital Corporation (CIC Capital), and
Bank of China (BOC), in a ceremony witnessed by US President Donald Trump, and Chinese President Xi Jinping. Under the terms of the agreement, the parties will work together on LNG marketing, financing, and an investment model and plan to have initial results in 2018.
The Alaskan government told the Financial Times, that the Chinese firms could invest up to US$43bn in the project, although this is subject to a final investment decision. The deal will also reduce the trade deficit between the US and Asia by around US$10bn annually.
The Alaska LNG project is expected to produce 20m t/y of LNG from natural gas from Prudhoe Bay and Point Thomson. It will consist of a three-train liquefaction plant at Nikiski in southern Alaska, a 1,300 km long, 1.1 m diameter pipeline, a gas treatment plant on Alaska’s North Slope, and interconnecting facilities.
The Alaskan government said that the agreement is “the most significant step” in monetising Alaska’s vast natural gas sources. The project suffered a setback in 2016 when three of its early partners, ExxonMobil, BP and ConocoPhillips decided not to invest further. However, Alaska state governor Bill Walker thanked the companies for “recognising the potential” of the project when they transferred its leadership back to the state. He also thanked the AGDC president Keith Meyer and the AGDC staff for their efforts, and the Alaska Legislature for continuing to fund the project.
“This agreement has all five necessary signatories – the buyer, the lender, the investor, the developer and the state,” Walker said. “This is a big project with big players and big benefits. There are more steps before a final investment decision is reached, but having the largest LNG buyer in the world participating in this project means the Alaska LNG project has favourable market engagement at the highest level.”
“CIC Capital is an experienced financial investor in the energy and infrastructure sectors and has long been interested in investing in American LNG infrastructure. CIC Capital is pleased to work with fellow industry and financial partners on this project,” said the Chinese state investment agency.
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