Update: 11:30 p.m.
Alaska will stay in the lead and continue writing the checks on its gasline megaproject.
But, Alaska Gov. Bill Walker and state gasline corporation head Keith Meyer say they are encouraged by a deal they inked in Beijing.
As President Donald Trump and Chinese President Xi Jinping looked on, Alaska’s trade delegation signed an agreement with a China-owned oil company giant Sinopec, one of the country’s banks and a sovereign wealth fund.
In a late night phone call with reporters on Wednesday, Meyer said the state has been trying to woo companies in China for months, “We’ve been through the courtship, we are now engaged.”
Details of the agreement are sparse but the deal links Alaska’s gas pipeline project to three China-owned entities as potential buyers, lenders and investors in the project.
Anchorage Democrat Rep. Geran Tarr says the deal is a positive step — but, she’s not sure it’s enough to convince the legislature to funnel more money into the gasline corporation.
“I think at this point the feeling in the legislature is the remaining $70-80 million is what AGDC has to work with to get to a decision point,” Tarr said.
Tarr said Alaska’s corporation will update the legislature in May of 2018 with a go or no-go decision by next December.
A substantive deal on the state-run gasline project could be a game-changer for Alaska’s struggling oil-based economy. The pipeline would cost between $45 billion and $65 billion to build. Its construction would temporarily add thousands of jobs to the state’s economy.
In its current form, the more than 800-mile-long pipeline would connect the Arctic and Pacific oceans and pipe LNG from Prudhoe Bay on the North Slope to the Kenai Peninsula, south of Anchorage, before loading it onto tankers and shipping it to Asian buyers.
Kerry-Anne Shanks, head of Asia gas and LNG research at Wood MacKenzie, an energy research and consulting group, wrote in an email that the Alaska LNG project is at an early stage of development.
“Wood Mackenzie classifies it as speculative, which means the commercial structure and marketing plan are not yet clear. It is likely to take a few years before the project is ready for FID (Final Investment decision). LNG projects generally take at least 4 years to construct from project sanction,” Shanks wrote.
Hugo Brennan, an Asia analyst for Verisk Maplecroft, wrote in an email that the deal is politically expedient.
“Its non-binding nature gives Sinopec the flexibility to quietly back away from the deal down the line. Beijing is mindful of the need to maintain varied commodity import routes,” Brennan wrote.
Original story
Alaska Gov. Bill Walker and state gasline corporation head Keith Meyer inked a deal in China today as U.S. President Donald Trump and Chinese President Xi Jinping looked on.
Details of the agreement are sparse but the deal links Alaska’s liquid natural gas pipeline project to three Chinese entities, including the state-owned oil company Sinopec, one of the country’s banks and a sovereign wealth fund.
Alaska’s gasline corporation says the agreement involves working cooperatively on LNG marketing, financing and investment in Alaska LNG. However, no one from the corporation returned an email seeking more information on the type of deal that was signed.
Walker and Meyer are expected to give a closed-door briefing on the deal to Alaska’s legislators.
A substantive deal on the state-run gasline project could be a game-changer for Alaska’s struggling oil-based economy. The pipeline would cost between $45 billion and $65 billion to build. Its construction would temporarily add thousands of jobs to the state’s economy.
In its current form, the more than 800-mile-long pipeline would connect the Arctic and Pacific oceans and pipe LNG from Prudhoe Bay on the North Slope to the Kenai Peninsula, south of Anchorage, before loading it onto tankers and shipping it to Asian buyers.
Editor’s note: This is a breaking news story that will be updated periodically.
Rashah McChesney is a photojournalist turned radio journalist who has been telling stories in Alaska since 2012. Before joining Alaska's Energy Desk, she worked at Kenai's Peninsula Clarion and the Juneau bureau of the Associated Press. She is a graduate of Iowa State University's Greenlee Journalism School and has worked in public television, newspapers and now radio, all in the quest to become the Swiss Army knife of storytellers.
