Meyer: Alaska LNG project poised to meet future Asia demand
The window to sell liquefied natural gas to Asian markets is drawing closer and bodes well for a $43 billion natural gas pipeline project designed to ship LNG to Asia, the state-run corporation's president told a collection of industry groups on Thursday.
Alaska Gasline Development Corp. president Keith Meyer said in coming years, Alaska will be ready to answer Asia's growing demand, which he adds will outstrip supply by as early as 2022.
"What that has caused is an acceleration of supply projects around the world," Meyer said, "so competition is heating up."
Meyer delivered the bullish speech on the AKLNG project to the Resource Development Council, a group representing mining, oil and gas, fishing and tourism industries.
"We've got significant momentum," he said. "We're winning over the global competition. We all have to get ready for this project. That's really been our messaging over the last several months. The new word for 2019 is 'accelerate.' We really want to put this project into a high gear."
The project is being led by the state, which hopes to begin delivering gas as early as 2024. It's also a decades-long effort to market North Slope gas, held mostly be leaseholders Exxon Mobil, BP and Conoco Phillips.
Meyer added the greatest demand comes from China, which is making an aggressive shift from coal to natural gas for environmental reasons. Meyer later noted what he believes are several selling points that help the state's position: geographic location for direct delivery; schedule certainty; price stability and supply certainty, which currently sits at nearly 35 trillion cubic feet.
"We've got one of the largest, proven conventional but stranded resources on the planet," Meyer said. "This is really our selling point to the world, that we've got over 100 years of gas supply. We just need to build the pipeline."
Meyer said building a pipeline that ships North Slope gas to Nikiski, where it would be converted to liquefied natural gas, would ultimately lead to more discoveries like what the state is experiencing with new North Slope oil developments feeding into the trans-Alaska pipeline system.
"You're hearing lots of good talk about the oil discoveries," he said. "A lot of those developments would not have been possible and would be done today if not for the oil line. It's the existence of the oil line that lowers the barrier to development to those smaller fields, even though those fields are big in their own right."
Meyer addressed new concerns over the country's escalating trade wars with China.
He noted other countries are taking advantage of the tension, marked by retaliatory tariffs. He says Canada is telling investors not to consider the U.S. because of the back-and-forth tariffs assessed by each nation.
Meyer added Russian President Vladimir Putin is trying to get his country in the LNG game and that Qatar is trying to re-assert itself as the top LNG exporter, having been overtaken by Russia.
"Our competitors are taking advantage of the trade friction, and saying the U.S. is back on its heels; it's time to move," Meyer said. Still, Meyer said so far the trade friction, "has not slowed us down and there does not seem to be any material impact in our discussions with our Chinese buyers."
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