Alaska sees natural gas new catalyst for closer ties with China

ANCHORAGE, the United States — The US resources-rich state of Alaska sees natural gas as a new catalyst for closer mutually beneficial ties with China, its largest trading partner, a top local executive said.

"We feel the Alaska liquefied natural gas (LNG) project is a perfect opportunity for bilateral trade and cooperation between China and America's largest state," Keith Meyer, president of the Alaska Gasline Development Corp (AGDC), told Xinhua in a recent interview, together with Alaska Governor Bill Walker, in Anchorage, Alaska's biggest city.

Meyer was talking about a mega-project that involves an 800-mile (about 1,300 kilometers) gas pipeline from the North Slope to south Alaska, where the gas can be super-chilled into LNG and loaded into oceangoing tankers.

If built, the state-run project, which is estimated to cost more than $40 billion and would export up to 20 million metric tons per year of LNG to overseas markets.

"So we look at the 1.4 billion people in China and their need for the clean burning natural gas that we have," Walker said, adding that China, now the world's second largest economy and biggest energy consumer, is moving fast from coal toward cleaner fuels.

"Very good marriage"

There will be "a very good marriage" and "a very beautiful fit" between Alaska and China through this project, stated Meyer.

"China is a very large and growing market for natural gas, for LNG, and the distance between Alaska and China is relatively short. It's also direct as there's no third nation or canal that ships have to go through," he elaborated.

The project is "one of the most significant infrastructure and revenue projects" for Alaska, "so I think that trade relationship will significantly improve the state economic condition," he added.

"So I look at this project very much as a catalyst and I look at it as the fuel for growth for Alaska," the executive said.

Meyer is accompanying Governor Walker next week on a trip to China for further promoting Alaskan tourism, seafood as well as the LNG project.

The purpose of the trip is to "continue to solidify" the relationship between China and Alaska at both government and business levels, he said, "This trip is about relationship building."

"We have put forth a very good proposal for China that can provide long term, reliable and secure natural gas supply for generations," he said. "We have also been in discussions with Chinese companies about cooperation in engineering and construction of the project."

The Chinese companies they have been dealing with "are gaining a much better understanding" of the Alaskan advantage and the benefits that can be gained "through a direct relationship" with Alaska, Meyer added.

Asked if the "Buy American, Hire American" policy, set out by the federal government under US President Donald Trump, would affect Chinese companies' participation in the project, Meyer responded: "We do not see that as being a barrier."

"It's an issue that we will address, but we think that the benefits to both sides through this project significantly outweigh any issues we have to address," he stressed.

Full steam ahead

Meanwhile, Meyer, who has worked on pipeline and natural gas projects for more than 35 years, dismissed a recent local Alaskan newspaper report which quoted Governor Walker as saying that Alaska will not put more money into promoting the LNG project until firm commitments are made by customers.

"The project is full steam ahead. The governor indicated we are expecting market agreements before the end of next year before asking for more money from the state," Meyer said. "However, we fully expect to have customer commitments and also will be engaging strategic partners."

"The project will keep moving without question," he added. "Unfortunately, the Alaskan press misinterpreted the governor, which is quite common here in Alaska."

Alaska put Meyer and AGDC, a state owned corporation, in charge of the LNG project in December 2016 after the state's three partners, ExxonMobil, BP and ConocoPhillips, withdrew from it.

According to the AGDC timetable, front end engineering and design work could begin in 2018 with construction kicking off in 2019.

While the current US administration under Trump is denying climate change by announcing its withdrawal from the Paris Agreement, Alaska, which has felt the increasing impact of global warming, is ready to set an example for addressing the challenge through cooperation with potential LNG buyers like China.

Through helping any recipient of the Alaskan LNG to greatly reduce emissions, the project is a wonderful way of "approaching the climate change from a commercial standpoint" while also "creating jobs and opportunities," stressed Walker.