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Alaska officials remain bullish on China natural gas partnership

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LNG Industry,


Reuters are reporting that Alaska officials announced on 11 July that they remain confident that China will help the state achieve its decades-old dream of building a pipeline to carry now-stranded natural gas from the North Slope to markets, despite growing US-China trade tensions.

China is expected to buy about 75% of the LNG shipped through the yet-to-be-built pipeline, so any tariffs that result from trade disputes could cause problems, Alaska Gasline Development Corp Vice President Lieza Wilcox said at a legislative hearing in Anchorage on 11 July.

“That said, this project is very well regarded in the government circles of both countries, in the trade circles of both countries,” Wilcox told lawmakers.

The US$43 billion project would send natural gas from the North Slope by pipeline to a liquefaction plant at Cook Inlet in southern Alaska. From there, the gas would be shipped overseas by tanker vessel. The field is expected to produce about 3.5 billion ft3 per day.

The proposed pipeline has been touted frequently by Trump administration members as important to its goal of exporting more energy. However, a series of tariffs levied by the United States and China – and subsequent additional threats – have raised concerns on both sides of the Pacific that the project could be a victim of increased tensions.

In June, China warned that it could impose tariffs on US energy exports, but that list did not include LNG.

Since the US started exporting LNG from Louisiana in February 2016, China has been the third biggest buyer of the fuel behind Mexico and South Korea.

Chinese companies bought about 169.2 billion ft3 of gas, or 14% of the LNG the US shipped between February 2016 and April 2018, according to federal energy data. 1 billion ft3 of gas is enough to fuel about five million US homes for a day.

AGDC and other state agencies say the project is on track, having secured agreements with institutions in China for help in developing and financing the project.

“It is frequently seen as kind of an olive branch in the trade discussions. And that’s part of the reason why we’re progressing the agreements on a fairly quick pace,” Wilcox said.

For nearly half a century Alaskans pushed for a pipeline to carry gas to markets. But the project has been considered uneconomic because of geographic isolation, competition and high cost.

Read the article online at: https://www.lngindustry.com/liquefaction/12072018/alaska-officials-remain-bullish-on-china-natural-gas-partnership/

 

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