Alaska natural gas project is promising and a win-win

Chinese Deputy Consul General Ren Faqiang remains upbeat on the prospect of the China-Alaska relationship across business, trade, politics and cultural domains.

"China is very serious about constructing an ongoing, mutually beneficial relationship with Alaska," said the diplomat, who has traveled several times to The Last Frontier to promote friendship and understanding since he took the post more than two years ago.

At the invitation of the World Trade Center Anchorage, Ren stressed at the group's annual conference that practical and concrete steps on both sides need to be taken to solve obstacles for future investment and project-execution, especially the $43 billion agreement between Alaska and Sinopec, China Investment Corp and the Bank of China for a long-sought pipeline to move natural gas from Alaska's North Slope to Asia.

China, Alaska's largest trading partner, in 2017 imported approximately $1.8 billion worth of goods and commodities, and the strong trade momentum is expected to continue.

Last November, Alaska Governor Bill Walker signed an agreement in Beijing during US President Donald Trump's visit to China to involve all parties working on various aspects of the natural gas pipeline project, including financing, marketing and construction.

According to the agreement, the status check is to start in 2018, and the definitive contract will be signed by year-end. Construction would start in 2019, with the goal to have the pipeline functional by 2024 or 2025.

The signing of the deal in November was only "the first step in a long march", said Ren, adding that the project is a "win-win" for both sides. "Forty-three billion dollars is not small money. We hope from many rounds of talks they (the negotiators) can reach a mutually beneficial deal for Alaska and China markets."

Raymond Qiao, managing director of the Bank of China's New York branch, also addressed the conference. There is still a long way to go before Chinese entities can decide to invest in this project, he said, adding that Alaska has the geographic proximity to the Asia-Pacific region, the state is rich in resources, and the market demand in China is strong.

"These advantages of (Alaska) are unique and well-established," Qiao said.

China is strongly interested in the project, which would deliver North Slope natural gas to Asian markets, he added. The gas would be shipped down an 800-mile pipeline and super-chilled into a liquid for oceangoing export out of Nikiski. "We are taking steps toward arranging a group of lenders to cover the project's huge financing costs," he said.

Many people are working on details, including the Alaska Gasline Development Corp, one of the major potential partners. "Their officials headed to China this week for ongoing discussions with the companies. This is still preliminary, subject to business terms, negotiations, legal terms and government approvals from both sides," Qiao said. "However, both sides are working closely toward reaching a solid commitment."

In order to advance the project, he traveled to Alaska last summer and checked several gas line work sites including Prudhoe Bay. "Bank of China is working to bring together a team of banks to finance $32 billion of the project. So we are arranging for that," Qiao said.

The remaining $11 billion would be injected from Sinopec, China Investment Corp, the state of Alaska and other investors. "It's promising," Qiao said. "If all the parties can try their best to control costs, get all the environmental issues cleared, obtain all the government approvals."

Contact the writer at junechang@chinadailyusa.com