Alaska still bullish on China gas part­ner­ship

Con­fi­dence re­mains de­spite pos­si­ble im­pact of tar­iffs on progress

Global Times US Edition - - BIZMARKETS -

Alaska of­fi­cials said 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 per­cent of the liq­ue­fied nat­u­ral gas (LNG) shipped through the yet-to-be-built pipe­line, so any tar­iffs that re­sult from trade dis­putes could cause prob­lems, Alaska Gasline De­vel­op­ment Corp (AGDC) Vice Pres­i­dent Lieza Wil­cox said at a leg­isla­tive hear­ing in An­chor­age on Wednes­day.

“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 $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 cu­bic feet 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 US 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 firms bought about 169.2 bil­lion cu­bic feet of gas, or 14 per­cent of the LNG the US shipped be­tween Fe­bru­ary 2016 and April 2018, ac­cord­ing to fed­eral en­ergy data. One bil­lion cu­bic feet 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.

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.

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