May 22 (UPI) -- With trade tensions easing between the world's leading economies, Alaska's governor said cooperating in the energy sector could reduce them even further.
Alaska Gov. Bill Walker arrived in China with dozens of business leaders in tow for a trade mission. With weekend negotiations leading at the federal levels to a thaw in a tense trade standoff, Walker said he was anticipating a successful round of talks.
"Thanks to President Trump and [Chinese] President Xi Jinping for working together to improve trade relations between our two countries," the governor said in a statement. "As a result, the timing of Alaska's trade mission could not be better."
For Walker's administration, the trade mission is an opportunity to build on momentum for a liquefied natural gas project in his state. The Alaska Gasline Development Corp. wants to build hundreds of miles of pipelines and associated infrastructure to process state gas into liquefied natural gas, a super-cooled form of gas that has more maneuverability than other piped resources.
In early May, the Alaskan division of British supermajor BP reached a gas sales agreement with AGDC, which takes BP's share of the gas from North Slope operations for the project. In March, the Federal Energy Regulatory Commission set a timeline for the project to receive its final environmental impact statement by December 2019. Walker said that timeline sets the project on a firm path toward completion and bolstered investor confidence.
"The Alaska LNG project is key to reducing the trade imbalance between the U.S. and China," the Alaskan governor said. "More broadly, Alaska has an array of businesses and organizations prepared to lay groundwork for more economic and cultural ties between our nations."
Bank of China Ltd. and Goldman Sachs agreed to serve as the global capital coordinators for the project. Both entities will help AGDC raise equity to fund full-scale development once all the necessary permits are in place.
In November, the state government and the AGDC signed an agreement with Chinese lenders and China Petrochemical Corp., or Sinopec, to advance discussions on the LNG potential in the state.
Alaska depends on oil for state revenue. In total, Alaska's Department of Revenue said revenue could decline by about 15 percent for the year to $10.9 billion, but said some of that decline was because of strong returns in the previous fiscal year.