The conditions of an agreement that give three Chinese companies 75% outtake rights to a $43 billion Alaska liquefied natural gas project are still being determined, project insiders said.
The project would include an 800-mile pipe to transport natural gas from North Slope to Nikiski, located on Alaska's Kenai Peninsula, for export to the international market.
It will provide "long-term and affordable gas supply" for Alaskan customers, as well as capitalize on the state's natural gas reserves by selling it to the Asian markets.
Timothy Fitzpatrick, vice-president of external affairs and government relations at Alaska Gasline Development Corp, said the two sides are still negotiating the terms and framework of Chinese companies' investment in the project.
But he said AGDC is very interested in working with its Chinese partners and helping China meets its clean energy goal.
On November 9, 2017, senior executives from Sinopec, the Bank of China, and CIC Capital, a subsidiary of China Investment Corp, signed a nonbinding joint development agreement with AGDC and then-Alaska governor Bill Walker.
The deal included 75% of Alaska LNG disposition in China and 75% financing from the Chinese companies.
The parties were originally scheduled to sign final agreements by December, but they agreed to extend the negotiation period for another six months, due to the extra time needed to go over the complex deal, project leaders said.
However, leaders at the state corporation said the deal with the Chinese partners remained largely unchanged despite trade tension and leadership changes at both the state and organization levels.
"We are still pursuing an agreement with Sinopec being an off-taker of LNG of up to 75% of the output, consideration of equity for CIC, and possibly Sinopec in the project's equity ownership, and the bank financing by Bank of China," said Lieza Wilcox, vice-president, commercial and economics, at AGDC.
China's concern for its environment has made it shift rapidly from coal to natural gas, a cleaner energy source that emits 50 to 60% less carbon dioxide in combustion than coal. The change has resulted in China’s importing more natural gas.
"Alaska is rich in natural resources, including natural gas. … China has an increased want for clean energy like natural gas," said Wang Donghua, Chinese consul general in San Francisco.
"I think both China and Alaska could benefit more if we strengthen the cooperation by fully liberating our respective advantages," he said.
Source:sxcoal
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