From KTVA
A gas pipeline project meant to send Canadian liquefied natural gas to Asia is making history — but an Alaska official says there’s still room for the state to compete in the Asian market.
According to Reuters the Canada LNG project was given the green light by a group of five partners, providing the fastest route to Asia for North American gas.
So, what does that mean for Alaska’s hopes and dreams of a gas line that caters to that same market?
“On net-net, it’s good news,” Keith Meyer, president of the Alaska Gasline Development Corp., told KTVA’s Daybreak Wednesday. “We don’t expect the demand to be taken by Canada.”
The final investment decision on Canada LNG, made Monday, has been a seven-year effort. Work on the project started several years before the state’s current project, Alaska LNG.
For that reason, Meyer says, AGDC was already accounting for a share of customers in the Asian market being claimed by Canada LNG.
“The volume [of gas] is already taken by the customers,” Meyer explained. “We’ve got letters of intent with two of their customers, but those customers have said that volume has already been accounted for.”
Canada LNG will transport gas from Dawson Creek in Northern British Columbia to Kitimat, B.C. for export to Asia. The pipeline itself is about 416 miles long, about half the distance of the proposed Alaska LNG pipeline.
But the project is similar in price. Canada LNG came in at $31 billion, versus price projections of $43 billion for the Alaska LNG project.
Meyer says the fact that the companies are willing to invest in a Canadian mega-project bodes well for Alaska LNG. According to Bloomberg, Canada LNG now represents the largest LNG commitment in the world in years.
“This will be the first big North American, West Coast plant, so I believe this is going to spur a little bit of West Coast envy and people will want that even closer project out of Alaska,” Meyer said.
Money for Canada LNG is coming from five investors, two of which are oil companies:
– Royal Dutch Shell plc
– Malaysia’s Petroliam Nasional Bhd
– Mitsubishi Corp.
– PetroChina Co.
– Korea Gas Corp.
Canada LNG does not rely on funding from the Canadian federal government or provincial government. In fact, the largest share of the project is owned by Shell.
When asked why none of the oil companies operating on Alaska’s North Slope have taken a similar initiative on the Alaska LNG project, Meyer replied:
“Well, I think the Alaska North Slope producers are very supportive of our project and I think at the end of the day we may see them be investors, it’s up to them. But there’s enough demand for our project too that I think financing will be able to be arranged.”
According to AGDC, Alaska LNG could begin shipping gas as early as 2024 if investors and federal permits are secured to keep the project on schedule.
Meyer says AGDC is currently focused on arranging long term gas off-take contracts with customers in order to secure debt arrangements with global banks.
