Details recently released by the Alaska Gasline Development Agency show that China would get 75 percent of the gas from the Alaska LNG gasline, and Asian markets would get the other 25 percent.
The project, originally targeted for startup in 2025, has been hurried ahead by two years since Gov. Bill Walker and AGDC President Keith Meyer visited China earlier this month and signed a “joint development agreement.”
In a Nov. 16 letter, AGDC has urged the Federal Energy Regulatory Commission to fast track the environmental review of the Alaska LNG gas line project, including issuing a schedule for the environmental impact statement process by Dec. 15.
AGDC submitted its application to FERC in April and has been answering myriad questions the federal agency has posed ever since.
Alaska LNG project is an integrated gas infrastructure system with three major components, including a gas treatment plant at Prudhoe Bay, an 800-mile pipeline from the North Slope to Nikiski, and a liquefaction terminal.
Meyer has asked FERC to finish the environmental impact statement by the Dec. 31, 2018, so the state can start exporting LNG by 2023.
Funding for AGDC is dependent upon appropriation by the Alaska Legislature. The agency has enough funding to stay open until the end of this fiscal year, June 30, but its future is uncertain after that. Funding, during a time of state fiscal crunch, may not be supported by the Alaska Legislature.
Originally, AGDC was one fifth owner of the project, but bought out TransCanada’s share and became one fourth owner, with BP, ConocoPhillips, and ExxonMobil. But the three oil companies said the project was not ripe for development due to current market conditions, and Gov. Bill Walker showed them the door in 2016. It’s now a state-owned project, with Gov. Bill Walker courting China as both the investor and customer.
Prices for natural gas are low, and getting FERC approvals are likely to be lengthy and expensive. Even after the final EIS is issued, environmental groups are already staging themselves to hold the project up in court, and could stall it for years.
Earlier, the governor said that 2025 was the target date for gas exports. But Walker has sought a $40 billion loan guarantee from the Trump Administration for the project, as part of Trump’s infrastructure program.
Details of the governor’s joint development agreement with the Chinese show that China is not obligated to any agreement or to expend any funds on the project.
Some 75 percent of the project debt financing from the Chinese would be in exchange for 75 percent of the gasline’s capacity for the life of the loan, with the remaining 25 percent reserved for AGDC to sell to other Asian markets.
With 100 percent of capacity awarded, the governor’s current plan shows no gas available for Alaska to bring down the cost of energy and provide energy for other development projects, such as the Donlin mine. In the original configuration of the gasline project, there were five offtake points for Alaska communities.
We didn’t save any of the gas for Alaska? :'(
When you sell something, you get money for it. We are exchanging gas for money so we can pay for goods and services, like education, jailing criminals, and the like.
I want money.
Have we not been in this situation before? We have had agreements previously with the Japanese and the South Koreans I believe.
The common thread is that no one ever makes any type of commitment.
Of course it is the interest of any gas-buying country to keep their options open and play one project against another to get the best deal.
They are using us and we are using them.
Probably just another one-night stand though.
Plenty of moolah for government bureaucrats and industry consultants in the meantime.
The oil companies are smart to stay out of this bs.
Thank you for reporting on the Joint Development Agreement between AGDC, the State of Alaska, Sinopec, CIC Capital, and the Bank of China.
To be clear, there will be as many natural gas offtake points as desired by Alaskan businesses and communities. Alaska LNG allocates 500 million cubic feet per day of in-state capacity as part of the base design, which is double Alaska’s current natural gas consumption.
Bringing gas to Alaskans is one of the foundational building blocks for AGDC; AGDC would never enter into a deal that does not provide gas for Alaskans.
Who is going to benefit from this agreement, I ask myself? If this Governor keeps making deals that only benefit his political career we could loose the remainder of our dividend and may even get an invoice to live here!!!
The governor is working very hard to make sure that those who work for a living, will get an invoice for living here.
It’s called a state income tax….
Will the Chinese pay for the natural gas with their new petro yuan currency and will they insist on using Chinese steel during construction. The wrong answer to these questions could definitely derail this project.
Also Chinese labor?
I think all of the agreement should become public, even the lawyer small print, not the 7 talking points!!
Unless I am missing something the gas on the north slope belongs to the companies who own the leases and the state doesn’t have a right to sell anything other than the royalty share.
Why do the Chinese get 75%, are there no other customers? Why can’t they just buy the gas? Do they really need to own it and do the lending as well? Are there not banks and infrastructure investors in the U.S. who can do this?
This is a huge opportunity for Alaska and the whole country. But is it worth it if we have to sell the crown jewels to the Chinese?
Do the Chinese see Alaska for the special place that it is? Or do they see us as another Zimbabwe to be exploited ruthlessly for the benefit of Chinese national interests?
Let’s hope Bill Walker and Keith Meyer can get this done without setting us up to be raped by the Chinese.
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