ALASKA LNG: $43 BLN

PLATTS - A deal between Chinese companies and Alaska's state gas corporation to build the $43 billion Alaska LNG Project appears to be on scheduled despite the trade war brewing between the US and China.

The target is still to have key commercial agreements signed by the end of 2018, Leiza Wilcox, commercial vice president of Alaska Gasline Development Corp., said Friday in an interview.

AGDC officials are largely shrugging off worries over the trade dispute, figuring it will be resolved before it will impede the long-term schedule for the project, which is expected to be operational in 2024.

The Chinese partners in a joint development agreement for the project will be in Alaska next week to continue negotiations on commercial terms, Wilcox said. The partners include Sinopec, which would purchase 15 million mt/year of LNG; Bank of China, which would provide about $30 billion in financing; and China Investment Corp., which would provide part or all of $10 billion in equity financing.

Governor Bill Walker's goal when the deal was announced in late 2016 was to have terms finalized by the end of December this year, Wilcox said.

Keith Meyer, AGDC's CEO, told the state corporation's board Thursday that Sinopec hopes to have engineering and technical service subsidiaries involved in the project, but that it does not intend to play a major role in construction management.

"Sinopec feels it does not have the required experience in Arctic construction to manage construction, although they would hope to provide engineering and other services," Meyer said.

Given that, AGDC is looking for a major construction and engineering company to manage construction and is currently interviewing two contenders, Meyer told the board.

POTENTIAL BUYERS

Under the proposed deal, Sinopec would purchase 75% of Alaska LNG's planned 20 million mt/year of production. AGDC is holding 25% of output, or 5 million mt/year, for other potential purchasers, primarily in Asia.

Discussions are underway with Tokyo Gas, Korea Gas and PetroVietnam and others for the remaining 5 million mt/year, Meyer told the board.

Alaska LNG is one of eight export LNG projects before the US Federal Energy Regulatory Commission, and there is concern that approvals of some projects may be delayed because of resource constraints at FERC, AGDC's vice president for engineering, Frank Richards, told the board.

FERC's schedule is to have the Draft Environmental Impact Statement complete by next spring. "We believe we have a greater than 50% chance of meeting that," Richards said, but there is still concern.

The estimate is based on work by a consultant hired by AGDC to analyze other LNG applications and FERC's internal workload.

Richards said FERC has started asking applicants to hire technical consultants to work with agency staff directly to cover gaps in FERC's own staff.

One gap identified so far is in FERC's review of fire suppression in LNG plants, Richards said. To cover that on Alaska's application, AGDC is close to issuing a request for proposals for a firm with relevant expertise to work with FERC staff, he said.

FERC's timeline on the EIS and the commission's overall authorization in 2019 needs to stay on track for the Alaska LNG partners to meet a planned 2020 Final Investment Decision and the goal to be operational in 2024.

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Earlier:

2018, January, 5, 23:35:00 LNG INVESTMENTS WILL UP BLOOMBERG - Energy companies will approve investments for more than 150 million tons a year of new supply capacity over the next four years, according to the report. By comparison, global consumption was 286 million tons in 2017. Projects in Qatar, Papua New Guinea, Russia and the U.S. are most economically appealing, followed by Mozambique, Australian expansion projects and an Alaskan mega-project.

2017, November, 14, 17:50:00 CRITICALLY IMPORTANT ALASKA API welcomed legislation that would allow for safe and responsible natural gas and oil development in a small non-wilderness portion of Alaska’s Arctic National Wildlife Refuge (ANWR). The legislation was released by the Senate Energy and Natural Resources Committee to be included as part of the budget reconciliation bill.

2017, November, 9, 13:35:00 U.S. - CHINA LNG China’s top state oil major Sinopec, one of the country’s top banks and its sovereign wealth fund have agreed to help develop Alaska’s liquefied natural gas sector as part of U.S. President Donald Trump’s visit, the U.S. government said on Thursday. The agreement will involve investment of up to $43 billion, create up to 12,000 U.S. jobs during construction, reduce the trade deficit between the United States and Asia by $10 billion a year, and give China clean energy.

2016, August, 30, 18:40:00 ALASKA LNG: LEAST COMPETITIVE “The Alaska LNG project is one of the least competitive on a cost of supply basis compared with other”

2016, March, 4, 19:55:00 U.S. LNG UP The United States is currently a net importer of natural gas, and gross imports represented nearly 10% of total supply in 2015, based on data through November. The United States imported 7.5 billion cubic feet per day (Bcf/d) of natural gas, mostly from Canada by pipeline, and exported 4.8 Bcf/d, mostly to Mexico by pipeline. For years, Alaska has exported LNG, mostly to Pacific Rim countries, but these volumes have been small. In addition to the Sabine Pass terminal that was the source of last week's LNG shipment, four other LNG export terminals are currently under construction.

2014, July, 22, 17:45:00 ALASKA LNG Alaska LNG project partners file export application with DOE