Alaska's state gas corporation struck an agreement with oil giants BP PLC and Exxon Mobil Corp. to advance the estimated $43 billion Alaska LNG liquefaction plant and pipeline project, amid concerns that the project might be shut down if it does not secure enough customers.

The agreement involves cooperation among Alaska Gasline Development Corp., or AGDC; BP; and Exxon Mobil to improve the project's competitiveness and obtain the approval of the Federal Energy Regulatory Commission for project construction, according to a March 8 news release. The project faces competition from other LNG projects, including the Royal Dutch Shell PLC-led LNG Canada export terminal project in British Columbia, which is targeting the same Asian markets as Alaska LNG.

"Our respective organizations share an interest in the successful commercialization of Alaska's stranded North Slope natural gas," said Joe Dubler, interim president of AGDC. "BP and ExxonMobil possess world-class LNG expertise which may help AGDC responsibly advance this project with maximum efficiency for the benefit of Alaskans."

The project in Nikiski, Alaska, is designed to have three LNG trains, two 240,000-cubic-meter storage tanks and liquefaction capacity of up to 20 million tons of LNG per year. A planned 800-mile, 42-inch-diameter pipeline with a maximum capacity of 3.5 Bcf/d would transport gas from the North Slope region to southcentral Alaska, for export and in-state distribution. It is scheduled to begin service in 2025.

In October 2018, the state-run corporation had agreed with China Petrochemical Corp., or Sinopec; Chinese sovereign wealth fund China Investment Corp.'s CIC Capital Corp.; and Bank of China Ltd. to make a final agreement for the project by Dec. 31, 2018. The partners, however, missed the deadline, with AGDC reportedly asking for a six-month extension in January to finalize a definitive deal for the project.