State, Korean gas buyer agree to collaborate on AK LNG
The state gasline corporation reached a preliminary agreement with one of the largest LNG buyers in the world June 28 in Washington, D.C.
Alaska Gasline Development Corp. President Keith Meyer and Korea Gas Corp. CEO Seung-hoon Lee signed a memorandum of understanding that puts in place a framework for the two state-run corporations on opposite ends of the LNG trade to work on development of, and possibly investment in, the $40 billion Alaska LNG Project.
Under the MOU, AGDC and Kogas, as it is commonly known, will set up a joint committee that will have decision-making authority to collaborate on Kogas’ potential involvement in development and in some fashion operations of the project, according to AGDC.
“This MOU between AGDC and Kogas is beneficial for both organizations. AGDC gains the opportunity to move Alaska LNG forward with an internationally recognized natural gas infrastructure company,” Meyer said in a corporate release. “Kogas gains the prospect of investing in Alaska LNG as well as participating in all aspects of project development and financing. The MOU is not exclusive and recognizes AGDC is in discussions with other parties to ensure timely development of Alaska’s energy infrastructure and export project.”
Kogas is the main LNG buyer in South Korea and the second-largest corporate LNG buyer in the world.
South Korea is also well established as the number two LNG importing nation in the world behind Japan. In 2015, South Korea imported 33 million tons of LNG, which was about 13 percent of the global LNG trade that year, according to the International Gas Union.
The Alaska LNG Project is designed to produce up to 20 million tons of LNG per year at full capacity, but that would almost certainly be split amongst numerous buyers.
AGDC’s top priorities this year are marketing the Alaska LNG Project to potential buyers and investors and subsequently establishing a commercial structure to underwrite construction of the trans-Alaska natural gas export project, Meyer has said.
The corporation and Gov. Bill Walker ultimately hope to have the project up and running in the mid-2020s.
While the AGDC and Kogas leaders posed for a handshake after signing the MOU, their bosses were also meeting in Washington, D.C., as part of President Donald Trump’s “Energy Week” initiative.
Walker met with South Korea President Moon Jae-in June 28 after Walker participated in an energy roundtable discussion at the White House, according to a release from the governor’s office.
“Korea has been one of the largest consumers of Alaska’s coal, timber and fish,” Walker said in a formal statement. “President Moon said he would like to add LNG to the list of imports and offered his government’s support of the Alaska LNG Project. I was pleased to hear President Moon say LNG will play a very important role in helping Korea combat climate change. I also told President Moon that during my meeting at the White House, President Trump had expressed deep support for the export of LNG from the United States to Asia, including Alaska’s LNG.”
AGDC is also currently holding an open season to solicit customer interest in the natural gas and liquefaction tolling project, Meyer said at the corporation’s June board meeting.
The open season will run from mid-June through August and AGDC’s goal with the marketing effort is to attract non-binding deals mainly from the state’s former partners in the project, the North Slope producers, to sell gas into it.
Elwood Brehmer can be reached at [email protected].