Chinese Investment Opportunities in Alaska

Transcription

1 Chinese Investment Opportunities in Alaska John Tichotsky, Ph.D. (Cantab.) Commonwealth North Energy Action Coalition July 26, 2018

2 Alaska is a resource state Largest oil and gas basin in North America 4 trillion tons of high quality coal: one ninth of world s known coal resource. World-scale lead/zinc deposits: including the world s largest zinc mine. World-scale gold and copper mines: numerous existing and potential. Graphite: America s highest grade largest, large flake graphite deposit. Significant rare-earth deposits. and 2

3 Alaska wealth is export Russian-American fur ( ) Yankee whaling ( s) Colonial Alaska federal territory US fur ( ) Gold and copper (Kennecott ) Canned salmon ( s) Military Alaska ( s) Alaska oil era (1950-present) Cook Inlet (1950-present) Prudhoe Bay (1969-present) George Rogers & Arlon Tussing, University of Alaska, Institute of Social & Economic Research Presentation for Alaskan Prospectors Society 3

4 Alaska s main trade destination

5 millions Alaska Exports to China $1.32 billion in 2017 $1, % 3.6% 0.4% 0.3% 4.9% 26.9% 60.2% Seafood $ million Mineral Ores $355.8 million Fishmeal $64.6 million Energy $49.0 million Forest Products $48.0 million Machinery* $5.9 million $1,200 $900 $600 $300 $

6 China as a Resource Buyer China is a major consumer of raw materials that can be produced in Alaska. China share of world raw material consumption 6

7 U.S. Focus on Trade and Energy China needs to buy more from U.S. 7

8 China Demand for Natural Gas Environment is a priority. 8

9 Alaska and China Establish Ties 9

10 Global Positioning Alaska is China s closest and most direct source of U.S. LNG. 7 to 9 days shipping. Direct route; no third nation or canal. 10

11 Primary Energy Demand Growth China is the biggest growth market for primary energy demand. 11

12 China LNG Demand to Grow Rapidly Demand for natural gas has grown dramatically, outpacing the ability to produce domestically. LNG import capacity is increasing rapidly to help satisfy future demand. 12

13 Joint Development Agreement Pence 13

14 Alaska LNG Project Overview An integrated infrastructure and energy project that will monetize Alaska s immense, but stranded, North Slope gas resources. Total project cost up to $43.4 billion. Commercial window of to begin transportation of gas to Asia annually. ASIA S CLOSEST, MOST DIRECT US LNG

15 Alaska s North Slope 35 TCF of proven and conventional gas resource. 200 TCF potential gas resource. Reliable oil & gas production for the 40 years. Alaska s gas is a stranded resource for the world market. North Slope Alaska s gas is proven and conventional. 15

16 Integrated Gas Infrastructure Gas Treatment Plant: Treat and compress 3.5 Bcf/d. Sequester all CO2. Pipeline: 807-mile (1,299 km), 42-inch (1.1 m) pipe. Established corridor under State of Alaska control. Delivers over 3.3 Bcf/d. LNG Production Facility: 20 MTPA; 3 trains with phased development opportunity. Two 240,000 m3 LNG storage tanks. All components Two berths, capable of 217,000 m3 vessels. including gas supply Fully-integrated are within In-service natural Alaska. gas treatment, pipeline, and liquefaction system. 16

17 Project Finance Structure A large, state-owned, single buyer supports debt financing for associated capacity provided from in-country lender. Remaining capacity is equity funded and sold into regional markets. Stable Pricing Debt for Capacity 75% of system capacity 75 % EQUITY 25 % DEBT ($32 Billion non-resource) Stable Pricing Onward sales in country Aggregated Chinese Buyers Regional Buyers Equity Capacity 25% of LNG Supply 17

18 Economic Benefits of Stable Pricing No harmful volatility. With the Alaska proposal, the energy bills of customers will not be subject to wild market swings or be linked to unrelated energy costs in distant markets. Energy price stability can improve economic growth. The most stable and predictable LNG price in the industry. 18

19 Federal Support 19

20 Alaska Trade Delegation 20

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26 Sinopec

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46 agdc.us Facebook.com/AKGaslineDevelopmentCorp Alaska Gasline Development Corporation

47 Sinopec Sinopec: Very large petroleum and petrochemical enterprise group. World s largest fully-integrated oil and gas company by revenue, with upstream, midstream, and downstream operations. China s largest producer and supplier of refined oil products. Largest oil refinery company. 2nd largest chemical company in the world. Sinopec s track record of LNG developments and investments: Sinopec has 3 LNG receiving terminals on China s coast (9 MTPA). Partner with ConocoPhillips in Australia Pacific LNG (APLNG) with an offtake commitment for 7.6 MTPA for 20 years. 20 year, 2 MTPA contract with ExxonMobil from Papua New Guinea (PNG LNG). 47

48 Bank of China Bank of China: World s 4th largest bank. China s most internationalized and diversified bank. Engages in commercial and investment banking and insurance and investment services. Track Record of Successful LNG Financing: Coral South floating LNG project in Mozambique. Tangguh LNG in Indonesia. Cheniere's Corpus Christi trains 1 and 2. Australia Pacific LNG. 48

49 CIC Capital China Investment Corporation (CIC): World s 3rd largest sovereign wealth fund. CIC Capital is a subsidiary specializing in making direct investments in infrastructure, mining, and energy (oil and gas). Acquired a 10% stake in Teck Resources Limited, which operates Red Dog Mine. Acquired a stake in 1 New York Plaza office tower for $700 million (1st direct U.S. investment). Track Record of Successful LNG Investment: CIC Invested $3.15 billion in GDF Suez Exploration & Production International SA and $850 million in Atlantic LNG Company of Trinidad and Tobago in