China, the world’s largest energy consumer, signed another major energy deal with the U.S., with three Chinese state-owned companies agreeing to develop the $43 billion Alaska liquefied natural gas (LNG) project, Kallanish Energy reports.
The five-party joint development agreement was signed Wednesday in the presence of U.S. President Trump and China’s President Xi Jinping.
The document was inked by the State of Alaska, the Alaska Gasline Development Corp.(AGDC) and three of the largest Chinese energy and finance companies: Sinopec, Bank of China and China Investment Corp. (CIC).
The Alaskan government said the “historic signing” is the most significant step toward finally monetizing the state’s vast resources of natural gas, a huge challenge during the previous Obama administration.
“This agreement has all five necessary signatories — the buyer, the lender, the investor, the developer and the state,” said Gov. Bill Walker. “This is a big project with big players and big benefits.”
He added there are more steps before a final investment decision (FID) is reached, “but having the largest LNG buyer in the world participating in this project means the Alaska LNG project has favorable market engagement at the highest level.”
ADGC said Thursday the parties have agreed to work cooperatively on LNG marketing, financing, an investment model and China content in Alaska LNG.
“Today’s agreement brings the potential customer, lender, equity investor, and developer together with a common objective of crafting mutually beneficial agreements leading to increased LNG trade between Alaska and China,” said Keith Meyer, president, AGDC.
Sinopec said it’s “interested in the possibility of LNG purchase on a stable basis from Alaska LNG,” while CIC noted it “has long been interested in investing in American LNG infrastructure.”