Alaska, China sign development agreement to advance AKLNG
Alaska and China have signed a joint development agreement to advance the Alaska LNG project.
According to the Alaska Gasline Development Corporation, the agreement was signed in front of president Donald Trump and China President Xi Jinping, "underscoring the international importance of the agreement."
AKLNG is three megaprojects rolled into one: a gas treatment plant on the North Slope, an 800-mile pipeline to Nikiski and an LNG plant to turn the gas into liquid for shipping.
"Under the agreement, the parties have agreed to work cooperatively on LNG marketing, financing,
investment model and China content in Alaska LNG, and get a periodic result by 2018," according to the release. (An Alaska Gasline Development Corporation press release on the signing is included at the bottom of this page.)
However, in the agreement, there is no mention of committed dollars to the project, which has an estimated price tag around $43 billion.
In a conference call Wednesday night, Gov. Bill Walker said the construction of the project could start as soon as 2019, and expects it will be up and running by 2024 or 2025.
Right now, there is no guarantee the pipeline will be built. If it does, China would receive 75 percent of capital costs, while Alaska would own the remaining 25 percent.
Gov. Walker says the project has standing encouragement from the U.S. and Chinese governments, which would help with country relations.
Meanwhile, The White House also announced a memorandum of understanding Wednesday with the agency in charge of building a massive natural gas project here in Alaska and a South Korean natural gas company.
The Korea Gas Corp. (KOGAS) and the Alaska Gasline Development Corporation (AGDC) set the framework for that agreement during President Donald Trump’s visit to the country. Governor Bill Walker is also along on the trip. Keith Meyer, the president of AGDG, is also along for a stop in Bejing.
However, AGDC couldn’t explain how this memorandum is different from the one the two agencies agreed on in June, and neither agreement seems to contain any sort of firm commitment from South Korea to buy the gas or put money into the project.
KOGAS is state-run and the second-largest corporate LNG buyer in the world. In June, AGDG said its agreement with KOGAS sets the framework for investment in the project, and cooperation on engineering, procurement and construction of the project. However, AGDG hasn’t provided KTVA a copy of the latest memorandum of understanding.
Before he left, Gov. Bill Walker said his goal for the overseas trip to Asia was to get a deal on the $43 billion project. Time is running out for the governor to find a buyer for the project. AGDG will run out of state money to operate next year, and with the legislature struggling to balance the state’s budget, it’s unlikely they will give the agency any more money.
Last week, the Governor expressed hope that a deal could be struck during his visit, pointing to the need for natural gas in Asia, and Alaska’s ability to commit to several decades of supply.
The Governor is talking with legislators tonight at 9:15 from Beijing.
Below is a press release from the Alaska Gasline Development Corporation about the signing.