Japanese energy developer Resources Energy says its utility companies would be willing to chip in for cheaper gas from the proposed $45 to $65 billion AlaskaLNG natural gas pipeline/LNG export megaproject.
The state of Alaska currently is partnering with BP, ConocoPhillips and ExxonMobil on the massive project, but one industry expert believes there’s a problem with these public-private partnerships, Kallanish Energy reports.
“Right now, the global market is oversupplied, vastly oversupplied, tremendously oversupplied. Prices are one-quarter of what they were in the stock market at its peak two and a half years ago,” Larry Persily, a former federal natural gas transportation advisor and now a special assistant on oil and gas for the Kenai Peninsula Borough, said Tuesday, Anchorage TV station KTVA reported.
Persily said there’s currently not enough need for gas, and the oil companies don’t want to spend big money on a pipeline until that changes in their favor. So Alaska Governor Bill Walker is looking for new partners.
“If I could take one item that’s the most important for the clients I deal with in Japan, it’s a stable, long-term supply of LNG,” said Mary Ann Pease, vice president of Resources Energy. “They don’t want their primary off-take coming from the Middle East, they would rather have it coming from Alaska.”
But if the oil companies don’t continue on the project, Persily isn’t optimistic foreign utility companies can pay the project costs, KTVA reported.
“The utilities in Japan are starting to take over, or have, over the last several years, taken small stakes in liquified natural gas in Australia and elsewhere, but we’re looking at 1%, 2%, single digits, very small slices,” Persily said.
Meanwhile, Pease says Japanese utilities have the money, the key is keeping them focused on Alaska. “I don’t know what the appetite is, but I can tell you that it was just announced about a month ago that there was $30 billion of energy investment money that would be focused on different projects coming from Japan over the next five years,” referring to money set aside by the Japanese government.
