Walker to court LNG buyers in Japan

The proposed pipeline route for the Alaska LNG Project, a consortium of oil companies (Image courtesy of the Alaska LNG Project).
The proposed pipeline route for the Alaska LNG Project, a consortium of oil companies (Image courtesy of the Alaska LNG Project).

Governor Bill Walker will travel to Japan on Saturday (Sept. 12) for a week-long trip to promote Alaska’s natural gas to potential buyers in Asia. The governor will be speaking at a summit in Tokyo and meeting with companies and industry representatives from around the region.

Download Audio

But back at home, it’s clear there are still major disagreements between the state and its partners in the Alaska liquefied natural gas project, or Alaska LNG. That’s the proposal for a massive pipeline to carry Alaska’s natural gas from the North Slope to Nikiski for export.

The state has proposed partnering with ExxonMobil, ConocoPhillips and BP to shoulder the estimated $50-60 billion cost.

Lawmakers have been expecting the governor to call a special session to approve early agreements. But on Friday, Walker said that’s up in the air.

“In a perfect world, we’d have all the agreements entered into and put that before the legislature,” Walker said. “I’m becoming, every day that goes by, less optimistic that that’s going to take place, but we’ll see. It’s a good goal to have.”

Walker said one major sticking point is an agreement on what would happen if one of the parties withdraws. He said its possible he may call a special session just to discuss buying out a fourth partner, the Canadian pipeline giant TransCanada.

The project is a major priority for the administration. Walker cited estimates that the pipeline could bring in more than $2-billion a year of revenue to the state, offsetting declines in oil revenue.

The governor also replied to comments from ExxonMobil CEO Rex Tillerson that Alaska has been its own “worst enemy” on the pipeline project. Tillerson told the publication World Gas Intelligence that changing demands from the state have delayed the project, saying “Every governor that comes in decides they’ve got a different way of doing this, which is why it never happens.”

Walker was unapologetic.

“I know that some companies are not comfortable with how aggressive I am for representing Alaska,” he said. “But that’s my job, and that’s what I’m going to do.”

And, Walker said, that’s why he’s going to Japan. The message there will be, essentially: one way or another, Alaska is bringing gas to market.

“We have failed in the past to step up and be Alaskans and act like a sovereign,” Walker said. “It’s time we act like the owner that we are, rather than sit back and let companies fit us into their portfolio as appropriate.”

In a statement responding to Walker’s comments, Exxon wrote that the company “has consistently said the Alaska LNG project… is the best option for commercializing Alaska’s natural gas reserves.”