A large delegation representing the three China-owned entities that might invest in Alaska’s $43 billion gas line project visited Prudhoe Bay and other key project sites this week in what state officials called a sign of China’s strong interest.
The 38-person group represented the Bank of China, oil company Sinopec and sovereign wealth fund China Investment Corp., said Keith Meyer, president of Alaska Gasline Development Corp.
“This was their first opportunity to send a large technical team to (study the project),” said Meyer. “We were pleasantly surprised at how large the group grew.”
Li Yang, vice chief engineer for Sinopec, was a top official in the group.
The Chinese entities paid for the weeklong visit to Alaska, which began early in the week, Meyer said. The trip provided a close-up look at the state-led plan to produce and sell huge quantities of North Slope natural gas to Asian markets.
“This is a major element of (their) gaining information as we move forward with the deal,” said Matt Kissinger, a commercial negotiator for the gas line agency. “It indicates they are very interested in the project and this is a very real deal.”
This was by far the companies’ largest delegation to visit Alaska and learn more about the project, said Mark Wiggin, deputy commissioner of Alaska Natural Resources. Smaller delegations visited Alaska last year, in spring and summer.
The state signed a preliminary deal with the Chinese entities in November, during President Donald Trump’s trade mission to China at a ceremony attended by Chinese President Xi Jinping and Trump. The gas line corporation hopes to sign firm commitments by the end of this year.
Sinopec would buy some of the project’s liquefied natural gas, Bank of China would lend money, and China Investment Corp. could invest, AGDC officials have said.
On Tuesday, the state gasline agency announced that Bank of China, along with Goldman Sachs, will help solicit investors for the project. That deal with Bank of China was signed during the delegation’s visit to Alaska, Meyer said.
On Friday, about 20 members of the Chinese delegation visited the Alaska Geologic Materials Center in Anchorage, a repository that includes drilling samples and information about the state’s oil and gas fields. Another group had traveled down a portion of the Dalton Highway from the Prudhoe Bay oil field by bus, reviewing some of the proposed gas pipeline route, Kissinger said.
At the geologic center, the Chinese and state officials were holding a closed-door meeting when a reporter arrived. Members of the Chinese delegation were not available for comment.
A key stop for the group was the Prudhoe Bay central gas processing facility on the North Slope, Kissinger said. Seeing it helps a person grasp the vast amount of gas available for the project, he said. There, natural gas is extracted from crude oil and reinjected back underground because the state and oil companies over the decades have never finalized plans to get the gas to market.
The meetings also included a visit to the proposed site in Nikiski where a plant would super-chill natural gas into a liquid so it can be loaded into oceangoing tankers.
China, trying to reduce carbon emissions and other pollution, seeks to boost the use of natural gas while taking steps to reduce coal-fired power plants.
Kissinger said most of the meetings for the project have taken place in China over the past year, because it’s more efficient than having the three entities travel to Alaska.
Meyer, who spent the week with the group, said the visit included a meeting in Anchorage with Alaska Native corporations providing services to the oil and gas industry, as well as the Alaska Support Industry Alliance, representing many contractors working in the industry.
“It was to show them Alaska has local companies that can do the work,” Meyer said.