Gov. Walker reveals details of Chinese gas pipeline deal

Expert says it is simply an ‘agreement to keep working’

Gov. Bill Walker on Tuesday released the details of a multibillion-dollar agreement signed between Alaska and China earlier this month and promised reporters at a press conference that better things will come in 2018.

 

“It really will open up Alaska, perhaps like we’ve never seen before,” Walker said of the state’s new ties to China, and suggested that the state could also benefit from Chinese tourism and Chinese demand for minerals.

In a gala ceremony Nov. 9, Walker signed a “joint development agreement” for the trans-Alaska gas pipeline project known as AKLNG. The agreement was signed with China’s state-owned bank, its state-owned petroleum company, and the Chinese equivalent of the Alaska Permanent Fund, in front of Chinese President Xi Jinping and U.S. President Donald Trump.

The Empire requested the text of the agreement that day, and the governor released it Tuesday, slightly less than two weeks later.

“There were no surprises in the agreement. It’s an agreement to keep working and see if this thing makes sense,” said Larry Persily, a former federal gas pipeline coordinator for Alaska and a former deputy commissioner of revenue.

According to the document, the Chinese or the state can withdraw from the arrangement at any time, without penalty. If that doesn’t happen, the two sides will work toward an agreement in which China will get 75 percent of the gas from the pipeline in exchange for financing its construction and an opportunity to buy a portion of the project.

“They would be a minority investor, not a controlling investor,” said Keith Meyer, president of the Alaska Gasline Development Corporation.

In response to a separate question, he said Chinese corporations might manufacture pipeline components or modules of the complicated gas plants at either end of the line, but they likely would not be involved in construction of the pipeline.

Meyer said the next few months will be spent in intense conversation and travel between China and Alaska as negotiations progress.

“With respect to this deal, there’s going to be a lot of interface between all three of the entities mentioned here and ourselves,” he said.

In Tuesday’s press conference, Meyer said he expects regulatory permission to come quickly.

Persily said that’s not likely. The Federal Energy Regulatory Commission has not even published a schedule for making a decision on approval, let alone a decision itself.

“To talk about making an investment decision in early 2019 and starting work is probably overoptimistic,” Persily said by phone from the Kenai.

He also pointed out that the state hasn’t even gotten oil and gas producers onboard with the idea of selling gas to China.

The agreement expires at the end of 2018, not long after next year’s general election.

In response to a question from the Empire, Walker said the agreement’s timeline was “absolutely not” determined by the election, in which Walker will appear on the ballot.

Walker said he was not involved in negotiating the timeline and saw it only when he arrived in Washington, D.C. before traveling to Beijing.

 

 

 

 


 

• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.

 


 

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