Alaska and three Chinese companies have agreed to a six-month extension to negotiate and conclude definitive agreements for a liquefied natural gas (LNG) project in the state, despite an ongoing U.S.-Sino trade war.

The Alaska Gasline Development Corp. (AGDC), China’s state-owned Sinopec Group, the Bank of China and CIC Capital, a subsidiary of China Investment Corp., agreed to extend the deadline for an agreement until June 30.

The four parties signed a joint development agreement (JDA) in November 2017 to develop the Alaska LNG project, which is estimated to cost $43.4 billion and as designed could export up to 20 million metric tons/year (mmty). A supplemental agreement was signed last September that continued negotiations to the end of 2018. AGDC has pledged to reserve 75% of the project’s LNG production capacity (15 mmty) for Sinopec.

“All of the parties realized that they needed a little more time to reach the final agreements,” AGDC spokesman Jesse Carlstrom told NGI. “They agreed to extend the deadline.”

As designed, Alaska LNG includes a three-train liquefaction plant in Southcentral Alaska at Nikiski, an 807-mile, 1.1 meter diameter gas pipeline, a North Slope gas treatment plant, and interconnecting facilities to connect the Prudhoe Bay gas complex to the gas treatment plant.

Carlstrom characterized the negotiations between the AGDC and the Chinese firms as “positive” and “very good,” and that substantial progress was made in 2018 toward a final agreement. He added that since the JDA was signed in 2017, numerous in-person meetings had been held in China and Alaska, which included visits to the North Slope and Nikiski.

“This extension is a good indicator that the parties are engaged and want to conclude a deal with Alaska,” Carlstrom said. “The parties in China see Alaska LNG as an opportunity worth pursuing, and that is why we’ve all agreed to work toward the June deadline. This is typical for a large, multi-billion dollar, multi-decade project. Just the paperwork alone often takes more than a year to conclude. From our end, this is not a step back. In fact, this is more encouraging than anything — that all parties are still engaged.”

Besides China, the AGDC has also been in negotiations with potential LNG buyers in Japan, South Korea and Vietnam.