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State of Alaska Courts Japanese Government on LNG

alaska

By MarEx 2016-09-14 23:53:34

The State of Alaska’s Governor Bill Walker met Friday with representatives of Japan's Ministry of Economy, Trade, & Industry (METI) and the Japan Oil, Gas, and Metals National Corporation (JOGMEC), a government body which works with industry to secure energy supplies for Japan. 

“Alaska’s relationship with Japan is a special one,” Governor Walker said. “This meeting further underscored not only Japanese interest in Alaskan natural gas, but also the general optimism that exists across the Pacific for our state to enter the international market. Japan is the largest LNG-buying nation in the world, and their interest in Alaska is very encouraging.”

The state of Alaska has recently assumed ownership of the Alaska LNG project, formerly a public-private venture with BP, ExxonMobil and ConocoPhillips. The three oil majors are reported to have expressed reservations about starting the multi-billion-dollar front end engineering and design (FEED) phase of the development, given weak LNG pricing in the Asia-Pacific region; they agreed that the state could take the lead and proceed on its own. 

Keith Meyers, newly appointed head of the Alaska Gasline Development Corporation, the public entity charged with the project, has stated that his top priority is to secure commitments from buyers – the key step towards convincing financiers and regulators of Alaska LNG's viability. 

“At the end of the day we need customer contracts because those customer contracts are what underpin the financing,” he told the AGDC's board last month. “The debt parties really don’t want to be engaged until you’ve got some of these other pieces in place."

Governor Walker will be visiting Singapore and South Korea soon to promote the project to other interested parties.  

If built, Alaska LNG's gas processing facility, 800-mile pipeline and 20-mtpa liquefaction plant would cost $50 billion or more, ranking the proposal among the largest public works projects in American history. AGDC expects that if all proceeds as planned, FEED engineering could begin in 2018 and construction could start as soon as 2019.