(SitNews) Ketchikan, Alaska - It was an historic day for the State of Alaska and the United States as Governor Bill Walker signed the five-party joint development agreement (JDA) for the Alaska liquefied natural gas (Alaska LNG) project yesterday in Beijing, China. This signing is the most significant step toward finally monetizing Alaska’s vast resources of natural gas. President Donald Trump and President Xi Jinping were present for the signing ceremony at the Great Hall of the People, underscoring the international importance of the agreement. 

“Because Alaskans need well-paying jobs and affordable energy to power our homes, schools and businesses, this Alaska LNG project is critical,” Governor Walker said.

The agreement was signed by representatives from the State of Alaska, the Alaska Gaseline Development Corporation (AGDC), the Bank of China, the China Investment Corporation, and the oil and gas company Sinopec. Under the agreement, the parties have agreed to work cooperatively on LNG marketing, financing, investment model and China content in Alaska LNG, and get a periodic result by 2018. 

“This agreement has all five necessary signatories - the buyer, the lender, the investor, the developer and the state,” Governor Walker said. “This is a big project with big players and big benefits. There are more steps before a final investment decision is reached, but having the largest LNG buyer in the world participating in this project means the Alaska LNG project has favorable market engagement at the highest level. This project will finally allow Alaska to reach its full potential as a state. As we move from having one of the highest unemployment rates in the country to the lowest, we will build a Stronger Alaska.”

Governor Walker said, “The gasline is key to building a Stronger Alaska. I thank President Trump for the full support he and his administration have shown for this project, as it brings the United States one step closer to energy dominance. When President Xi visited Anchorage six months ago, he shared with me his desire for deepening the mutually beneficial ties between China and Alaska. I thank him for expediting that vision to reality. I especially thank Commerce Secretary Wilbur Ross and his team for their strong belief in the Alaska LNG project, and all of the hard work they put into making this day happen." 

Alaska LNG is designed as a 20 million tonnes per annum (MTPA) integrated LNG system comprised of a three train liquefaction plant in Southcentral Alaska at Nikiski; an approximately 800 mile, 1.1 meter diameter gas pipeline; a gas treatment plant on the North Slope of Alaska; and various interconnecting facilities to connect the Prudhoe Bay gas complex to the gas treatment plant.

“Today’s agreement brings the potential customer, lender, equity investor, and developer together with a common objective of crafting mutually beneficial agreements leading to increased LNG trade between Alaska and China,” said Keith Meyer, president, AGDC.   

“This is an agreement that will provide Alaska with an economic boom comparable to the development of the Trans-Alaska Pipeline System in the 1970s,” said Alaska Governor Bill Walker.

The joint development agreement was signed by the State of Alaska, AGDC and three of the largest Chinese energy and finance companies - Sinopec, Bank of China and China Investment Corporation (CIC).

According to CIC Capital, “CIC Capital is an experienced financial investor in the energy and infrastructure sectors and has long been interested in investing in American LNG infrastructure. CIC Capital is pleased to work with fellow industry and financial partners on this project." CIC Capital is China’s direct investment arm, which is mandated to make direct investments and manage bilateral and multilateral fund investments in order to pursue long-term financial returns and promote international investment cooperation. CIC Capital is a market-oriented commercial entity with a specialized mandate and global reach. As a long-term financial investor, CIC invests on a commercial basis. With an estimated $813.5 billion, China Investment Corporation is the world’s third largest sovereign wealth fund.

“Sinopec is interested in the possibility of LNG purchase on a stable basis from Alaska LNG,” according to Sinopec a huge, state-owned, fully integrated energy and chemical company. Based in Beijing, Sinopec is the largest oil and gas company in the world by revenue with annual revenue of USD 455.49 billion.

“As the most internationalized bank in China, Bank of China is willing to facilitate the China-U.S. energy cooperation and provide financial solutions for this transaction by taking advantage of its vast experiences and expertise in international mega-project financing,” according to Bank of China a state-owned commercial bank. Bank of China ranks in the top 10 largest banks in the world by market capitalization value and provides a comprehensive range of financial services to clients in 52 countries and regions around the world.

Speaker of the Alaska House Bryce Edgmon (D-Dillingham) issued a statement in response to the announcement of the joint development agreement for the long-awaited Alaska LNG Project. 

Edgmon said, “I look forward to seeing the details, but at first glance, this joint development agreement is very encouraging for the thousands of Alaskans who never lost hope that a natural gas pipeline could one day become a reality. Alaska is home to tremendous natural gas reserves and today’s agreement shows that we are perfectly situated to supply liquefied natural gas to Asian markets,” said Rep. Edgmon. “The members of the Alaska House Majority Coalition fought to keep the AK LNG project alive by keeping money in the budget, and it appears that was the right decision. A pipeline project will bring jobs, investment, and, perhaps most importantly, a renewed sense of hope that Alaska’s best days are ahead of us, not behind.”

House Republican Resource Committee members and the Representative from Nikiski also weighed in on the announcement saying they are positive about the potential for Alaska’s Liquefied Natural Gas to move closer towards development. Quoting a news release, the announcement of a 5-part agreement, including China, is a strong indicator for the project known as AKLNG. Most large LNG projects around the world involve investment from countries that purchase LNG and their banks.

“This is once again the kind of news we hoped to see under the Trump administration. In less than one year Alaska has seen leaps and bounds towards developing resources beneath our soil and waters,” said Rep. Chenault (R-Niksiki). “I’m eager for a gas pipeline to become part of Alaska’s legacy. I look forward to seeing all the details in this joint development agreement.”

House Resource Committee members Dave Talerico (R- Healy), Chris Birch (R- Anchorage), George Rauscher (R- Sutton) and DeLena Johnson (R-Palmer) are closely following the project and the details which will help us better understand its impacts.

“This latest news is a sign that Alaska is once again becoming competitive in Liquefied Natural Gas,” said Rep. Johnson. “Our great state has vast resources that are untapped. LNG could bring jobs and global recognition unseen to date.”

According to House Republican Resource Committee members, plans for buying the gas and building the pipeline remain unknown. The House Republicans said they are looking forward to hearing terms of this deal to ensure it is in the best interest of the state.

Governor Walker said, “I also thank the Alaska Legislature for staying the course in funding the Alaska Gasline Development Corporation so the state could reach this historic milestone. Additionally, I thank BP, ConocoPhillips and ExxonMobil for recognizing the potential benefits to the State of Alaska when they offered in February of 2016 to transition the lead of the project to the State. AGDC President Keith Meyer, his staff and board members have worked tirelessly since that transition to bring Alaska to this point with the market. I thank them for their countless hours and sleepless nights.”

U.S. Sens. Lisa Murkowski , Dan Sullivan, and Rep. Don Young, all R-Alaska, issued a joint statement yesterday:

“We congratulate Gov. Walker and all who are working on the Alaska LNG project on this milestone. We also thank President Trump for his strong support of the project and efforts to reduce our trade deficit with China, which is Alaska’s largest trading partner.

“The responsible development of Alaska’s natural resources offers a great opportunity to create good jobs and new wealth in our state and across the country, while paying down both state and federal deficits, improving our balance of trade, and strengthening our national security. We look forward to learning more about this announcement and are ready to work with all stakeholders to advance the Alaska LNG project.”

Editing by Mary Kauffman, SitNews

Source of News:

Office of Governor Bill Walker
www.gov.alaska.gov

Alaska Gasline Development Corporation (AGDC)
An independent, public corporation of the State of Alaska
www.agdc.us

Alaska House Majority Coalition
akhouse.org

Alaska House Republican Resource Committee
akleg.gov

 

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