A Chinese oil company along with a top bank and the nation’s sovereign wealth fund have agreed to back Alaska’s proposed natural gas project, a $43 billion effort aimed at bringing gas from Alaska’s North Slope to market.
Sinopec, CIC Capital and the Bank of China signed a joint development agreement Thursday, during President Donald Trump’s trip to Beijing to advance the project. It is part of $250 Billion in U.S.-China deals unveiled during that trip.
The agreement doesn’t include specific financial commitments or an agreement to purchase gas, reports Bloomberg.
The project, as currently proposed, would bring North Slope gas to a liquefaction plant in Southcentral Alaska by an 800-mile pipeline and would produce up to 20 million tons of LNG a year.
The state of Alaska and the Alaska Gasline Development Corp. presented the deal as a major milestone: “We’ve been through the courtship; we’re now engaged,” AGDC President Keith Meyer told reporters on a call, according to Alaska Dispatch News’ account.
And Alaska Gov. Bill Walker said in a release that the deal would “provide Alaska with an economic boom comparable to the development of the Trans-Alaska Pipeline System in the 1970s.”
But other observers cautioned that much could still change.
“There are more steps before a final investment decision,” former federal gas line coordinator Larry Persily, told ADN, citing expensive steps such as permitting and design that have yet to be undertaken.
Meanwhile Kerry-Anne Shanks, an Asia energy consultant with Wood Mackenzie said her firm ranked the deal as “speculative” noting that several years of work remain before any final financial commitment would come.
The deal is not the first Chinese foray into Arctic LNG.
Chinese petroleum company CNPC owns a 20 percent stake in Russia’s Yamal LNG project, while the Silk Road Fund owns another 9.9 percent.
And earlier this month CNPC and the China Development Bank signed deals with Novatek, the Russian company with a majority stake in the Yamal project, to take part in a second gas project in the region, the Arctic LNG 2 Project.