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Alaska LNG developer taps Bank of China, Goldman to help finance $43B project

The state-run Alaska Gasline Development Corp. is bringing on Bank of China Ltd. and Goldman Sachs & Co. LLC to help line up financing for its proposed $43 billion Alaska LNG project.

In a March 27 news release, the company, known as AGDC, said it plans to raise funds in multiple rounds that will include offers to Alaska residents, municipalities, native corporations and private equity groups. Initial equity will be used to pay for the developer's working capital requirements, with subsequent rounds going to fund full-scale development of the LNG export project and associated 807-mile pipeline after it receives all necessary permits.

"Bank of China and Goldman Sachs are well positioned to provide AGDC with world-class institutional knowledge and resources required to arrange the equity and debt financing to build Alaska's natural gas infrastructure and LNG export project," AGDC President Keith Meyer said in the release.

The state corporation in November 2017 signed a nonbinding joint development agreement with the Bank of China, China Investment Corp. and China Petrochemical Development Corp. while state officials were in Beijing as part of President Donald Trump's visit to Asia.

Though Trump has promoted U.S. LNG exports to China, the trade relationship between the two countries is rocky. Administration officials on March 22 said the White House will impose tariffs on $50 billion of Chinese imports, a move some energy experts have said could make it more difficult to persuade potential LNG buyers in the country to sign up for long-term volumes of U.S. gas. China is already subject to a 25% tariff on imported steel and a 10% tariff on imported aluminum, which the LNG industry has said will raise costs for already pricey liquefaction and export terminals.

Bank of China said in the news release that it believes the proposed LNG project is "a very important project for China-U.S. economic ties."

Alaska LNG is scheduled to receive a preliminary environmental impact statement from the Federal Energy Regulatory Commission in March 2019, with a final review in December of that year. The project first filed with FERC for its 20 million-tonne-per-annum liquefaction terminal in April 2017. AGDC expects the project to enter service in 2024 or 2025.