WGC: Alaska LNG Awaits Chinese Buying Decision

WASHINGTON DC – Almost seven months after Tokyo Gas signed a letter of intent to buy LNG from Alaska, the Chinese companies committing to take 75% of the gas and provide 75% of the loans have yet to sign up formal sales agreements. This leaves the US state, which owns the entire project, unable to offer the rest to other customers, a senior executive told NGW during the World Gas Conference here  June 28. "Once they declare how much, we can then decide how much to sell to other markets," he said.

The planned terminal has gas committed from BP's North Slope project, and the 800-mile pipeline to Nikiski on the coast will also be able to supply gas to mining and other industries in Alaska, displacing diesel. There will also be liquids to 

The project had been planned for many years with BP, ExxonMobil and ConocoPhillips selling the gas, TransCanada building the pipeline and the state of Alaska also taking some equity. But when the pre-front-end engineering and design was finished at the end of 2016, the gas price abroad was too low, the executive said. That left Alaska the sole shareholder, the company now known as the Alaska Gasline Development Corp.

In March, the Federal Energy Regulatory Commission (Ferc) said it planned to issue a draft environmental impact statement in March 2019, and if all goes to plan, the $43bn project could start up in 2024-5, the company says, thanks in part to quick work by  Ferc.

There is little doubt about China's appetite for gas, delegates heard; the president for life, Xi Jinping, is committed to making the skies blue again, which can interpreted as a personal guarantee for gas producers as coal use is pushed out, a financier said. China also imports pipeline gas, with 38bn m³/yr expected to flow through the Russian Power of Siberia line at the end of the decade.