Dec. 5 (UPI) -- A letter of intent was signed with a Japanese company to secure liquefied natural gas from a possible development in Alaska, a state pipeline company said.
The Alaska Gasline Development Corp. signed a letter of intent with Tokyo Gas Co. on the possible sale and purchase of liquefied natural gas from the Alaskan company's portfolio.
"The letter of intent signed today signifies the continuation of this decades-long relationship between Alaska and Tokyo Gas Co., Ltd. and helps round out the sales volumes from the Alaska LNG project," the Alaskan company's president, Keith Meyer, said in a statement.
The Japanese handshake is the second Asian nod for Alaskan LNG in less than a month. China Petrochemical Corp., known informally as Sinopec, agreed last month to advance discussions on the LNG potential in Alaska. That agreement was signed in the presence of U.S. President Donald Trump and Chinese President Xi Jinping.
An LNG project in the design phase in Alaska would connect a natural gas reservoir in Prudhoe Bay through 800 miles of pipe to a liquefaction plant on the southcentral Alaskan coast.
Analysts were somewhat skeptical on the significance of the Chinese agreement. The LNG project in Alaska is still in the early stage of development and Kerry-Anne Shanks, the head of Asia gas and LNG research at consultant group Wood Mackenzie, said the agreement is largely speculative as neither side has made any formal commitments.
Asian economies, Japan's in particular, have a growing appetite for LNG. Demand for LNG in the Japanese market may be limited, however. With its weak economy, Japan's consumption of electricity has declined for five straight years.
Nevertheless, Tokyo Gas Co. President Michiaki Hirose said Alaskan gas made good business sense.
"As the closest source of North American LNG to Japan, with a shipping time of as little as seven days point to point, Alaska LNG is naturally an economic and reliable source of LNG for Tokyo Gas Co., Ltd.," he said.