May 8 (UPI) -- Foreign entity commitment to an Alaskan project meant to bring liquefied natural gas to the export market brings it closer to reality, the state governor said.
The Alaskan division of British supermajor BP reached a gas sales agreement with the Alaska Gasline Development Corp. for product from the North Slope.
"Having BP, one of our longtime partners on this project, commit its share of the gas for sale underscores the progress we continue to make as we work toward building a stronger Alaska," Alaska Gov. Bill Walker said in a statement.
AGDC wants to build 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. The project includes an 807-mile pipeline across Alaska.
The Alaskan company will take BP's share of the gas from North Slope operations, where the British supermajor holds a minority share. 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.
"We think this is good for the state, good for BP and good for the environment," BP CEO Bob Dudley said.
AGDC's project would have an annual design capacity of 3.9 billion standard cubic feet per day peak capacity of natural gas.
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 Alaska.
Even amid simmering trade tensions between the world's leading economies, Commerce Secretary Wilbur Ross said that China should buy more LNG to help offset a U.S. trade deficit while at the same time catering to Beijing's efforts to green up its economy.
Alaska's governor leaves later this month for a trade mission to China.