Alaska LNG CEO: We need more commitments to offtake before we make a final investment decision.

Glenfarne, an energy developer, must secure agreements to purchase a further 3 million metric tonnes of liquefied gas before making any final investment decisions on the $44 billion Alaska LNG project.

Brendan Duval, CEO of Glenfarne, said that the lead developer for the Alaska project has been in discussions with two potential buyers about adding the remaining volumes to the 13 million tonnes of annual sales agreed upon so far.

JERA, one of Japan's largest LNG buyers, and Tokyo Gas have signed preliminary agreements for offtake. Glenfarne must have 80% of the LNG plant's 20 million ton annual capacity secured through offtake agreements before it can make a final investment decision.

Duval stated that the last 3 million tonnes of material will be moved very quickly.

The Alaska LNG project is a two-phase development consisting of a pipeline as well as an export facility. Its main goal is to supply Asian markets.

Phase One will deliver natural gas approximately 765 miles (1 231 km) to the Anchorage area from the North Slope. Phase Two will add 42 miles of pipeline to the Alaska LNG Export Facility in Nikiski. Construction is expected to begin a year after the pipeline construction begins.

Duval said that Glenfarne anticipates delivering gas through the pipeline portion of the project by 2029.

The project will allow U.S. LNG produced to be delivered directly to Asian markets, without having to go through the Panama Canal and around 'the Horn of Africa. This would reduce transit costs and time.

U.S. officials say that Alaska is less than a third of the distance from Japan or Korea to the Middle East. During the conference, Interior Secretary Doug Burgum spoke. This not only dramatically reduces transit time, but it also increases energy security. (Reporting and writing by Yuka Obasashi; editing by William Mallard, Jamie Freed and Katya Golubkova)

(source: Reuters)