AGDC President: New law restricting foreign investments won't stop Alaska pipeline

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ANCHORAGE, Alaska (KTUU) — An effort in Congress to get tough on foreign investors, principally those from China, shouldn’t affect the Alaska LNG project and its proposed natural gas line, the head of the Alaska Gasline Development Corp. said.

“We’re not looking at majority ownership by the Chinese or control by foreign entities, so we’re really looking at control by the United States entities or more specifically by AGDC,” said Keith Meyer, the president of the state-owned corporation. “But also, we really don’t have any advanced technology.”

The Wall Street Journal reported Thursday that Congress was poised to strengthen the Committee on Foreign Investment in the U.S. — usually known by its acronym, CFIUS. A bill to do that was added to a “must-pass” military spending measure now in Congress. A vote could come as early as next week, the Journal reported.

The bill on CFIUS was introduced last year by Sen. John Cornyn, R-Texas. It picked up seven Republican and five Democratic sponsors, including Sen. Dan Sullivan, R-Alaska.

CFIUS could recommend a project be cancelled if it interfered with U.S. security.

In a separate interview, an independent oil and gas expert, Larry Persily, agreed with Meyer that the change in CFIUS would not affect the Alaska project. Persily questioned whether investors in China would even buy into the $43 billion project to the extent that it would come under the purview of CFIUS.

“We know that Chinese companies are interested in buying the gas. That’s entirely different than actually putting money in it, and being an equity investor,” Persily said. “I believe there’s some interest in being an equity investor, but much more interest in just buying the commodity and letting someone else take all the risks in investing and ownership.”

“If they just buy the gas, it’s a commodity, it’s like soy beans, it’s like salami, it’s like cheese,” Persily added. “You don’t have the same federal regulatory oversight if they become an investor, an owner, of what is called critical infrastructure in the United States, or technology."

Far more serious is the climate on China in the United States, Persily said.

“I don’t think the legislation itself would directly affect the Alaska LNG project,” Persily said. “But the continued focus, the growing awareness of the controversy, the animosity, the trade wars between President Trump, the United States and China — that’s not good for the project.”

Meyer and other pipeline officials say the project is moving along. A supplemental environmental impact statement for another project managed by the AGDC, the Alaska Stand Alone Pipeline Project, was approved by the U.S. Army Corps of Engineers in June.

The ASAP project, known as the “small diameter” pipeline, would primarily provide gas to Alaska customers. But at 36 inches, the ASAP line would be nearly as large as the 42-inch diameter AK LNG line, which will be built primarily for the export market but would also provide gas for Alaskans.

The AGDC says only one of the lines would be built, but the approval of ASAP is good news for AK LNG, because both largely share a common route of buried lines. The larger project includes a liquefaction plant in Nikiski for gas exports.

“AGDC elected to continue to pursue the ASAP regulatory process to completion in order to have an assured pipeline alternative to provide gas to Alaskan communities, and to help expedite approval of the Alaska LNG Project,” officials said when the ASAP environmental impact statement was approved.

The U.S. Federal Energy Regulatory Commission is preparing the environmental impact statement for AK LNG. It said it expects to be done in December 2019.



 
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