Senior executives from the State of Alaska

The State of Alaska in the US has reached an agreement with Chinese state-owned companies to jointly develop liquefied natural gas (LNG) at an estimated cost of $43bn.

The signatory parties to the agreement include Alaska Gasline Development (AGDC), China Petrochemical (Sinopec), CIC Capital, and Bank of China (BOC).

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Under the agreement, the parties will work on LNG marketing, financing, investment model and China content in Alaska LNG.

Designed as a 20 million tonnes per annum (mtpa) integrated LNG system, the gas infrastructure project comprises a three train liquefaction plant in South Central Alaska at Nikiski, an approximately 800-mile, 1.1m diameter gas pipeline, as well as a gas treatment plant on the North Slope of Alaska.

AGDC president Keith Meyer said: “Today’s agreement brings the potential customer, lender, equity investor, and developer together with a common objective of crafting mutually beneficial agreements leading to increased LNG trade between Alaska and China.”

“Bank of China is willing to facilitate the China-US energy cooperation and provide financial solutions for this transaction by taking advantage of its vast experiences and expertise in international mega-project financing.”

Alaska LNG also contains several interconnecting facilities to link the Prudhoe Bay gas complex to the gas treatment plant.

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Sinopec, which has annual revenue of $455.49bn, intends to buy LNG from the project.

Bank of China said in a statement: “As the most internationalised bank in China, Bank of China is willing to facilitate the China-US energy cooperation and provide financial solutions for this transaction by taking advantage of its vast experiences and expertise in international mega-project financing.”

AGDC also signed a memorandum of understanding with PetroVietnam Gas (PVGAS) to explore potential opportunities of LNG supply from AGDC to serve LNG import projects in Vietnam.

In addition, the agreement includes collaboration to evaluate the possibility of upstream resource investment in Alaska.