The state of Alaska and the Japan Bank for International Cooperation (JBIC) on Wednesday signed a memorandum of understanding (MOU) that could advance a large-volume natural gas pipeline and related liquefied natural gas (LNG) export facility to commercialize the state’s stranded gas reserves.
JBIC is one of the world’s largest financiers of LNG projects, according to Alaska Natural Resources Commissioner Dan Sullivan, who was in Japan this week to sign the agreement, participate in an LNG conference and meet with business and government officials.
On Thursday it was announced that Sullivan was resigning as DNR commissioner effective Sept. 24. His resignation letter did not give a reason for the decision.
Among topics for the parties to discuss outlined in the agreement are the natural gas pipeline and LNG export facilities, as well as oil, “strategic and critical minerals,” electric power, environmental technologies, water and waste management and renewable energy technologies. State officials will be bringing up projects that they would like JBIC to consider for international investment, according to the agreement.
“The goal of this trip was to build upon the extensive engagement that the [Gov. Sean] Parnell administration has undertaken in the past few years to develop strong relationships with the world’s leading LNG buyers, their governments, and consumers,” Sullivan said. “The agreement we’ve signed focuses on opportunities for Japanese companies and JBIC to become involved in resource development projects in Alaska — in particular, a large-volume liquefied natural gas pipeline and export facility.”
Alaska has long sought a pipeline by which it could commercialize its vast natural gas reserves on the state’s North Slope. Having given up on a pipeline that would have ultimately carried gas to the Lower 48 states, the state is pursuing a pipeline and LNG export option to serve Asian markets. However, there is the threat that just as it lost the race to supply the Lower 48 states to shale gas, it could lose in the global LNG race, too.
“The world has more than enough LNG supply options,” said Larry Persily, federal coordinator for Alaska gas pipeline projects. “We’re not the only ones out there,” he said in June at a joint meeting of the Alaska House and Senate resources committees (see Daily GPI, June 3).
The major producers active in Alaska have been collaborating on plans for a pipeline and LNG export project at the direction of the state. Last fall they came up with a cost estimate of $45-65 billion-plus (see Daily GPI, Oct. 5, 2012). The producers have emphasized the need for state support of such a project, including the provision of attractive royalty terms for gas production.
Sullivan signed the MOU with JBIC Managing Director Koichi Yajima. During his trip, Sullivan was expected to meet with senior officials from Mitsui and Co., Osaka Gas Co., Tokyo Gas Co., Anadarko Petroleum Corp., Resources Energy Inc., BP-Asia Pacific, ExxonMobil Corp., Apache Corp., Korea Gas Corp., DOWA Metals and Mining Co., and Sumitomo Metal and Mining Co. He was also scheduled to meet with officials from Japan’s Ministry of Economy, Trade and Industry, the Japan National Security Council and the Japan Oil, Gas & Metals National Corp.
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