Walker unveils terms of Alaska-China LNG agreement
Gov. Bill Walker has revealed details of this month’s agreement for a proposed $40 billion Sino-Alaskan project to tap the state’s natural gas reserves, giving Chinese officials an option to buy the bulk of its output.
At a Tuesday press conference in downtown Anchorage, Walker and other state officials unveiled the eight-page joint development agreement between Alaska and Chinese authorities -- written in English and Chinese -- to promote liquefied natural gas development through the Alaska LNG project.
The project, which had faced limited support in the state Legislature prior to the agreement, calls for linking Prudhoe Bay gas production sites to a gas treatment plant on the North Slope. The treated gas would then be sent south through nearly 1,300 kilometers of pipeline to a liquefaction plant in Nikiski, on Cook Inlet in Southcentral Alaska.
All told, the system would process an estimated 20 million tonnes of gas per year, from what the agreement refers to as 35 trillion cubic feet of proven North Slope reserves.
The agreement offers China the chance to take 75 percent of the LNG produced by the Alaska project, “for delivery to China at a cost-based and stable price utilizing the benefits of strategic financing and investment.”
It also calls for a “transparent and feasible investment model” to be approved by relevant regulatory authorities, as well as the potential for Chinese petroleum giant Sinopec to become involved in “engineering, procurement, construction and project management opportunities” in the overall development of the system.
The distribution of costs from the Alaska LNG project is “subject to further agreement.”
The JDA, originally signed Nov. 9, is set to be in effect until Dec. 31, 2018. unless any of its signatories end it earlier.
Walker and AGDC president Keith Meyer signed the document, as well as senior officials from Sinopec, CIC Capital Corp. and the Bank of China.
Joe Vigil contributed information to this story.