Alaska Gasline Development Corporation and three Chinese companies missed a self-imposed Dec. 31 deadline and have given themselves a six-month extension to negotiate and sign definitive agreements on the AKLNG project.
The new deadline between AGDC and China’s state-owned Sinopec Group, the Bank of China, and CIC Capital, (a subsidiary of China Investment Corp.), is June 30. The State of Alaska’s new fiscal year starts July 1.
In September, AGDC pledged 75 percent of the project’s LNG production capacity to Sinopec, and set Dec. 31 at the deadline for agreements on the final terms.
The board of AGDC will meet on Jan. 10 at 9 am, and some knowledgeable observers predict leadership changes at the agency are in the works.
On Jan. 7, Gov. Michael Dunleavy replaced four members of the board of directors. The move was expected since AGDC has been spending millions of dollars on what critics say looked a lot like using the agency for re-election efforts for former Gov. Walker. With Walker’s devastating loss, it appears the Chinese partners understand the need to learn more about the new governor and his direction for the agency.
When Walker came into office, he too made immediate changes to the board on Jan. 6, 2015, just prior to the board’s first meeting of that year. Walker dismissed former state Sen. Drue Pearce; Al Bolea, a retired senior BP manager; and board chairman Richard Rabinow, a former ExxonMobil senior pipeline project manager. Soon after that, John Burns left the board, as did the president of the agency, the late Dan Fauske, who left under pressure.
By the middle of 2016, the agency’s vice president of finance quit; Bruce Tangeman had come to the agency in 2014 after the passage of SB 138, which outlines the state’s participation in the project. Tangeman is now commissioner of Revenue under Gov. Dunleavy.
Walker in 2015 also instructed the AGDC board not to sign confidentiality agreements, citing transparency concerns. He took the project in an entirely new direction, wresting control of it from the private sector major oil companies that were the state’s previous partners. And he made deals with China.
If built under the Walker plan, the gasline would export up to 20 million mt of LNG annually, with three-quarters of it going to China and one-quarter available for other buyers. AGDC has been in talks wth Japan, Korea, and Vietnam to lock down those other buyers.
The elusive AKLNG project has been estimated to cost between $43 and $60 billion and would bring natural gas from a gas treatment plant to be built on the North Slope down to tidewater in Nikiski, where it go through a liquefaction plant and be exported. It’s the largest project in North American history.
Former Gov. Sean Parnell was tasked by Gov. Dunleavy in late 2018 with reviewing the project. He advised Dunleavy to keep the project on track through the Federal Energy Regulatory Commission process now underway. Even if there are no customers nailed down yet, the draft environmental impact statement is scheduled for completion in February and FERC could issue a certificate by 2020.