Energy developer Glenfarne needs to secure offtake agreements for a further 3 million metric tons of liquefied natural gas before making a final investment decision on the $44 billion Alaska LNG project, its chief executive said on Sunday.
The lead developer of the Alaska project is in talks with two potential buyers to add the remaining volumes on top of 13 million tons of annual sales preliminarily agreed so far, Glenfarne CEO Brendan Duval told the Indo-Pacific Energy Security Ministerial and Business Forum in Tokyo.
Japan’s major LNG buyers JERA and Tokyo Gas are among the companies that have agreed to preliminary offtake agreements. Glenfarne needs 80% of the LNG plant’s targeted annual capacity of 20 million tons secured under offtake deals before proceeding with a final investment decision, he said.
“(The) last 3 million tons will move very quickly,” Duval said.
The Alaska LNG project combines two phases of development – a pipeline and an LNG export facility – aimed mainly at supplying Asian markets.
Phase One is expected to deliver natural gas about 765 miles (1,231 km) from the North Slope to the Anchorage region. Phase Two will add nearly 42 miles of pipeline under the Cook Inlet to the Alaska LNG export facility in Nikiski, which is expected to start construction a year after pipeline construction starts, Duval said.
Glenfarne expects to start delivering gas via the pipeline portion of the project in 2029, Duval added.
The project would open direct access for U.S.-produced LNG to Asian markets without having to pass through the Panama Canal or around the Horn of Africa, reducing transit time and costs.
“Alaska, from a trade standpoint, is about one-third the distance to Japan or Korea than it is to the Middle East,” U.S. Interior Secretary Doug Burgum said during the conference. “This dramatically shortens transit times, but also dramatically increases energy security.”
(Reporting by Yuka Obayashi; Writing by Katya Golubkova; Editing by William Mallard and Jamie Freed)