Alaska governor touts pipeline project that faces hurdles

JUNEAU, Alaska (AP) - Gov. Bill Walker on Tuesday touted the benefits a major liquefied natural gas project would bring to Alaska, though the project, which the state is pursuing with Chinese partners, is far from assured.

Walker, speaking in Anchorage, told reporters the project could provide affordable natural gas to communities, create thousands of jobs and generate up to $2 billion a year in revenue for the state.

Walker’s office released the agreement that Walker and Keith Meyer, president of the state-sponsored Alaska Gasline Development Corp., signed this month with leaders of Sinopec, China Investment Corp. and the Bank of China. Sinopec is a major oil and gas company.

The agreement doesn’t obligate any party, and it doesn’t require that they pursue this project exclusively.

Instead, it calls on them to explore by May 31 the feasibility of investing in the Alaska project, which would move gas from the prodigious North Slope to Asian markets, and pursue terms to advance the project, including the potential for Sinopec to be involved in engineering, construction and other aspects.

But Walker said the agreement is significant, a result of work that has included building relationships with Chinese officials, including the country’s president, and getting the project on the White House’s radar and promoting it with the Trump administration.

Larry Persily, a former federal coordinator for Alaska natural gas projects, said it’s good to have interest in the project. But “people are getting prematurely euphoric,” he said.

The project has laid out an aggressive timeline, which Persily questions, and it has many hurdles to clear, including regulatory reviews and negotiations with the North Slope producers for the gas, he said.

The politics also are complex, he said. While President Donald Trump wants deals with the Chinese, he also has criticized China on trade, Persily said.

Persily also cautions against reading too much into revenue estimates, saying there are still-unanswered questions that could affect the state’s share.