Alaska Governor Bill Walker signed a Memorandum of Understanding on Tuesday with Japan-based Resources Energy, Inc. for liquefied natural gas development and export out of Cook Inlet.
The agreement stems from Japan’s desire to branch away from nuclear power, in favor of LNG in the aftermath of the massive 2011 earthquake, which caused the shutdown of the Fukushima nuclear plant.
Governor Walker says the memorandum of understanding doesn’t include many specifics.
“It’s just more of a cooperation agreement acknowledging that they have a need and we have a need,” he said. “Our need is for a market; their need is for a supply. And so, it’s the first step of what could be a long relationship.”
Resource Energy is working on longer-term development plans for North Slope LNG which could come to fruition by 2025. But, companies are expecting a market window in Japan before then, so Governor Walker says REI is considering a project in Cook Inlet.
“It is a small scale effort in Cook Inlet to just sort of get something, sort of a foot in the door, get something started, some flow going in that direction,” Walker said.
REI is confident LNG exports from Cook Inlet would be viable. The company anticipates a 1,000,000 ton capacity by 2019, increasing to as much as 3,000,000 tons.
REI spokesperson Shun-ichi Shimizu says the company is looking into the costs and figuring out exactly what infrastructure will be needed at the Mat-Su Valley’s Port MacKenzie.
“We have to build a brand new LNG facility there, so I can’t say exactly right now what sort of development we have to expect in Port MacKenzie,” Shimizu said.
Shimizu says the company expects to have a better idea of what will be needed by the end of March 2015.