June 19 (UPI) -- With energy resources on the line, Alaska Gov. Bill Walker said he was heading to Washington next week to discuss trade tensions with U.S. and Chinese officials.
"Next week, I will meet in Washington with leaders from both governments who have been at the table leading the efforts to avoid an unnecessary trade war," he said in a statement late Monday.
U.S. President Donald Trump upped the ante late Monday with broader trade pressures on China, the world's second-largest economy. China, for its part, took action last week by putting U.S. energy on the target list for sanctions.
Walker led a delegation to Beijing last month. The trade mission was 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. 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.
"Alaska has abundant resources, from natural gas and seafood to beer and baby food," Walker said. "These resources enable our state to dramatically reduce the trade deficit between the United States and China, if we can finalize agreements to increase exports of our products."
House Bill 331 passed in Alaska in May. Walker requested the legislation to use bonds to pay oil tax credits to oil and gas exploration companies, clearing off some of the debt from the state balance sheet at a discount.
The state Department of Revenue prioritizes petroleum in its state revenue for fiscal year 2018. In total, the department said revenue could decline by about 15 percent for the year to $10.9 billion, but attributed that to strong returns in the previous fiscal year.
China, for its part, could source LNG from established suppliers like Australia or Qatar.