The Alaska Gas Development Corp. (AGDC), a major energy developer in the U.S. northwestern state of Alaska, is moving steadily toward a December deadline for agreements to sell liquefied natural gas (LNG) to Chinese buyers, an Alaska news outlet reported Friday.
Managers of the Alaska state gas company AGDC told a recent Board of Directors meeting that there are no major obstacles in getting the Alaska LNG project moving ahead, a report of the frontiersman.com said.
AGDC CEO Keith Meyer told the board that the AGDC’s agreement with British multinational oil and gas giant BP plc. (BP) on LNG sales signed last week is “a significant development.”
“This is a binding precedent agreement, which means there is clarity on volume and price,” the key components of a final gas sales agreement hoped to be concluded later this year, Meyer said.
Alaska’s gas line project is a major initiative of Alaska Governor Bill Walker’s administration, which would see an estimated 30 trillion cubic feet (TCF) of gas from Prudhoe Bay, taken down through a 1,287-km-long pipeline and turned into LNG at a plant before being shipped overseas.
Meyer said in previous briefings that if the AGDC is able to sign, as expected, sales, financing and equity investment agreements with Chinese companies, including Chinese energy powerhouse Sinopec, Bank of China and China Investment Corp., the Alaska project should be able to deliver LNG to Asian customers.
He said the AGDC needs to secure about 800 million U.S. dollars in equity investment later this year to finance final engineering and early procurement work.
The AGDC announced last month that it had signed a deal with Goldman Sachs and Bank of China to help raise funds for its 43-billion-U.S.-dollar LNG project.
Lieza Wilcox, AGDC’s vice president for commercial and economics, told the AGDC board that Sinopec, which would be a major buyer of Alaska LNG, is considering an equity investment.
China Investment Corp., a major Chinese sovereign wealth fund, is a likely equity investor, Wilcox said.
Last November, Sinopec and a pair of financial institutions, including Bank of China, signed an agreement to advance Alaska’s LNG export project.
China is Alaska’s largest trading partner and leads the world in projected natural gas consumption in an effort to cut carbon emissions and other pollution from coal-fired power plants and diesel engines.