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State-run developer asks to extend deadline for deal with Alaska LNG partners

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State-run developer asks to extend deadline for deal with Alaska LNG partners

Alaska Gasline Development Corp. has asked for a six-month extension to finalize a definitive deal with its Chinese partners for the development of the Alaska LNG liquefaction plant and pipeline project, the Fairbanks Daily News-Miner reported Jan. 2.

The state-run corporation in October 2018 signed an agreement with China Petrochemical Corp., or Sinopec; CIC Capital Corp.; and Bank of China Ltd. committing to make a final agreement for the project by Dec. 31, 2018. Negotiations are still underway despite the missed deadline, Alaska Gasline spokesman Jesse Carlstrom said, according to the news report. "[J]ust because we've reached the end of the year, that does not mean we all have to put our pencils down and walk away and say, 'Hey guys, that was a great effort and time's up,'" Carlstrom was quoted as saying.

Under the October 2018 agreement, Alaska Gasline would reserve 75% of Alaska LNG's production capacity for Sinopec, which would be an off-take customer. CIC Capital may choose to become an equity investor. Bank of China would work on refining Alaska LNG's financing structure.

The $43 billion 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. It also involves the construction of an 800-mile, 42-inch-diameter pipeline with a maximum capacity of 3.3 Bcf/d that would deliver gas from the North Slope region to southcentral Alaska. Alaska LNG is scheduled to begin service in 2025.