Alaska governor outlines upcoming Japan trip to speak at conference on liquefied natural gas

IndustriesAssociated Press

Gov. Bill Walker said Friday he is heading to Japan next week to speak at a conference on liquefied natural gas and spread the word about Alaska's proven gas reserves.

Walker is listed as a keynote speaker at the LNG Producer-Consumer Conference in Tokyo on Wednesday.

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He said he plans to meet with prospective LNG buyers about bringing the gas to the global market. He also plans to meet with producers, but stressed that he is not going to Japan to look for partners for a proposed major LNG project in Alaska.

Walker said he was setting up individual meetings with companies to talk about the state.

"It's much more efficient to meet with them while they are there, rather than me spending weeks, if not months, traveling around to different countries and cities to meet with different companies. They will all be there," he said at a media briefing.

Walker noted the state's market advantage, saying it has the closest U.S. gas in relation to Asia. He also said Alaska has known reserves of gas because the gas is put back into the ground during the oil extraction process.

"So it's the most proved reserves on the planet, I believe," he said.

Walker's administration has been working on advancing the project, which the governor sees as crucial for the state's future economic fortunes. Alaska depends heavily on oil revenues to fund state government and faces significant deficits amid low oil prices. Walker said Friday the state's deficit is running between $7 million and $10 million a day.

The state is using savings to help balance its budget.

The proposed $45 billion to $65 billion LNG project is still in an early stage, with no decision by its partners on whether to build it.

Walker's administration has been involved in negotiations aimed at advancing the mega-project. The goal has been to have a fall special session for state lawmakers to consider project-related contracts. Walker said Friday a special session was possible to deal with the issue of buying out TransCanada Corp.'s position in the LNG project.

Under an agreement that predates Walker's administration, the Canadian pipeline company would hold the state's interest in the pipeline and gas treatment plant, with the state having an option to buy back part of that interest. During a legislative debate on the issue last year, it was cast as a way for the state to not have to bear as much in upfront costs as it would without that partnership.

Walker has said he plans to recommend to legislators that the state buy out the position, which he estimates would cost in the range of $100 million. Under the TransCanada agreement, the state would have to reimburse TransCanada for its development costs, plus 7.1 percent.

The other partners are Exxon Mobil Corp., BP, ConocoPhillips and the Alaska Gasline Development Corp., which would hold the state's interest in liquefaction facilities.

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