Will Alaska be able to cash in on Asia’s expanding demand for natural gas? Alaska Gov. Sean Parnell has given Exxon Mobil Corp., BP and ConocoPhillips until the end of September to provide the state with plans on how the oil giants would go about pumping natural gas from the North Slope to southern Alaska, where it would be condensed into liquefied natural gas (LNG) for export.
An estimated $40-to-$50 billion pipeline is “unprecedented” in terms of the capital commitment, according to a letter written jointly by the three companies, and they want “competitive and stable fiscal terms” before committing to a project of such scope.
But if an LNG pipeline and processing plant is built, it could reap major profits, Bloomberg reports. Kurt Gibson, director of the Alaska Gas Pipeline Project Office, told Bloomberg that a new LNG site could generate $20 billion in annual sales, based on July prices of LNG in Japan.
In Asia, LNG demand is booming. By 2025, Japan, China, India and South Korea will be the largest consumers of LNG. China’s annual gas consumption in 2017 alone is estimated to be about 28 percent of the reserves identified on the North Slope.
Alaska’s attempt to ship gas to the lower 48 stalled after U.S. shale output increased substantially.
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