Gov. Bill Walker and his gasline team touted an agreement signed Nov. 8 with three Chinese mega-corporations as the largest step the state has ever taken towards finally putting together a North Slope natural gas project.
After a few days to digest the situation, legislators’ reaction has been more subdued.
Senate Resources Committee Chair Sen. Cathy Giessel, R-Anchorage, said she first sought out LNG industry experts to determine exactly what the arrangement, characterized as a joint development agreement by Walker and Alaska Gasline Development Corp. President Keith Meyer, substantively is.
Walker stressed the joint development agreement between the state, AGDC and the integrated Chinese oil and gas giant Sinopec, the Bank of China and the $813 billion sovereign wealth fund China Investment Corp., includes all the pieces needed to make the $40 billion Alaska LNG Project a reality: a gas seller, buyer, and project financiers and investors.
Meyer said in a briefing following the signing that the substance of the joint development agreement goes beyond what would be found in a letter of intent from a prospective gas buyer or project investor.
AGDC Board of Directors Chair Dave Cruz emphasized during an October project update to legislators that the state-owned corporation was seeking to have a letter of intent by the end of the year. Meyer has repeatedly said letters of intent are paramount for gas sellers because while they fall short of being a full-fledged take-or-pay contract, Asian gas customers do not back out of them.
The joint development agreement keeps AGDC on schedule to make a final investment decision on the project at the end of 2018, Meyer said further Nov. 8.
On the other hand, Giessel described it as “another in a line of (memorandums of understanding)” with potential Asian LNG customers or investor companies.