Tokyo Gas has signed a letter of intent (LoI) on the proposed Alaska LNG project. The Alaskan plan featured strongly in US President Donald Trump’s November visit to Asia, with a memorandum of understanding (MoU) signed with PetroVietnam and a joint development agreement with Chinese companies.
The LoI with Tokyo Gas paves the way to start talks on supplying LNG from the project. The Japanese company noted its long history with Alaska, saying it had begun buying LNG in 1969. Tokyo Gas said it was working on diversifying and expanding its supplies and overseas business interests, under its “Challenge 2020 Vision”.
Tokyo Gas’ president, Michiaki Hirose, noted that Alaska was the closest source of North American LNG to Japan, “with a shipping time of as little as seven days point to point”, As such, “Alaska LNG is naturally an economic and reliable source of LNG for Tokyo Gas.”
The LoI continues the links between the state and Japan, Alaska Gasline Development’s president, Keith Meyer, said, and “helps round out the sales volumes from the Alaska LNG project”.
The Alaska LNG development has an estimated price tag of US$43 billion for the full three-train and 897 mile (1,298 km) pipeline development. Production from the facility, to be located at Nikiski on Alaska’s south coast, would be 20 million tpy. The plan is for buyers of the LNG to provide 75% of the required cash, taking 75% of the supplies. The remaining 25% would be sold by Alaska Gasline.
Alaska Gasline signed a deal on November 9 with a number of Chinese parties, including Sinopec, CIC Capital and the Bank of China (BOC). According to a factsheet issued last month, a definitive agreement should be signed in 2018, with construction starting in 2019. Commercial operations would begin in 2024-25.
In addition to the proposed LNG exports, the Nikiski plant could also provide rural supplies to communities along Alaska’s coastline and even bunkering opportunities at Adak, in the Aleutian Islands.