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China's Sinopec still major buyer of Alaska's LNG project: report

August 10, 2018


Abstract : China's oil giant Sinopec Corp. will continue to be a principal buyer of gas from a 43-billion-U.S.-dollar LNG project in the northwest U.S. state of Alaska, though it will no longer participate in the construction of the Alaskan mega energy project.

SAN FRANCISCO, Aug. 10 (Xinhua) -- China's oil giant Sinopec Corp. will continue to be a principal buyer of gas from a 43-billion-U.S.-dollar LNG project in the northwest U.S. state of Alaska, though it will no longer participate in the construction of the Alaskan mega energy project, a media report said recently.

Sinopec is still interested in 75 percent of the liquefied natural gas (LNG) produced from the project, despite its withdrawal from future construction of Alaska LNG pipelines, Alaska Gasline Development Corp. (AGDC) President Keith Meyer told Anchorage Daily News Thursday.

Sinopec does not "have any Arctic pipeline (experience) -- they've got a pipeline they built that is longer than ours; it's got a higher altitude than ours, but it's not this permafrost stuff" in Alaska state, Meyer said.

He noted that Sinopec officials had told him the Chinese oil company remains open to a subcontractor role in final design and construction.

Sinopec, the world's largest oil and gas company, had originally expressed interest in the construction of the four-year-plus Alaska LNG pipelines via its engineering and construction subsidiary units.

But the Chinese firm dropped the plan after its officials traveled to the state and stayed there for a week reviewing the project's technical documents and making a field tour to assess the 1,291-km-long route the North Slope to Nikiski on the Kenai Peninsula.

Alaska has huge gas resources in its North Slope area. Proven gas reserves are 35 trillion cubic feet, with an additional 200 trillion cubic feet of potential reserves.

Alaska depends on oil for state revenue, and the AGDC wants to build a thousand-plus-long pipeline and associated infrastructure to process state gas into liquefied natural gas.

Alaska Governor Bill Walker and Meyer signed a non-binding joint development agreement with Sinopec, the Bank of China and China Investment Corp. on Nov. 8, 2017, when U.S. President Donald Trump visited China to seek more business deals between the two countries.

The Bank of China and China Investment Corp. will continue to be potential investors of the Alaska LNG project.


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