BEIJING, Nov 9 (Reuters) – China’s top state oil major Sinopec, one of the country’s top banks and its sovereign wealth fund have agreed to help develop Alaska’s gas sector as part of U.S. President Donald Trump’s visit, company and government statements said on Thursday.
Sinopec, China Investment Corp and the Bank of China will work with the Alaskan government on LNG marketing, financing and China’s role in developing the state’s major liquefied natural gas (LNG) project.
Aiming to tap its North Slope gas reserves, the state created Alaska Gasline Development Corp (AGDC) in 2010 to build a gas treatment plant and pipeline network to produce up to 20 million tons of LNG per year for export.
The U.S. government said in a statement the deal will involve investment of up to $43 billion, create up to 12,000 U.S. jobs during construction and reduce the trade deficit between the United States and Asia by $10 billion a year.
Securing supplies of LNG will help meet China’s growing appetite for clean fuel as the government tries to wean the country off dirty coal as part of its push to clear the skies. The United States wants to sell more of its excess gas abroad.
Sinopec said in a statement it was interested in buying a “stable” supply of LNG from the project, while CIC said it has been interested in investing in U.S. LNG infrastructure for a while.
Alaska and the U.S. government touted the economic benefits of China’s involvement in the project.
“This is an agreement that will provide Alaska with an economic boom comparable to the development of the Trans-Alaska Pipeline System in the 1970s,” Alaskan Governor Bill Walker said in a statement.
AGDC’s project includes a gas treatment plant, an 800-mile (1,287 km) pipeline to south central Alaska for in-state use, and a liquefaction plant in Nikiski to produce up to 20 million tons of LNG per year for export.
Alaska is pursuing foreign investors for its oil and gas industry in a bid to compete with lower-cost shale projects and reverse a decades-long output decline.
Alaskan crude production has fallen by three-quarters since 1988, a decline that has contributed to budget deficits and jeopardized the operation of the Trans-Alaska Oil Pipeline, which runs from the North Slope to the southern port of Valdez.
Reporting by Matt Miller and Josephine Mason; Editing by Tom Hogue and Richard Pullin