Tokyo Gas signs LOI with Alaska Gasline on LNG purchase

TOKYO (Reuters) - Tokyo Gas Co Ltd said on Tuesday it signed a letter of intent (LOI) with Alaska Gasline Development Corporation (AGDC) regarding the sale and purchase of liquefied natural gas (LNG).

The move follows China’s biggest state oil company Sinopec, one of the country’s top banks and its sovereign wealth fund agreeing last month to develop the $43 billion natural gas project in Alaska, as the cash-poor U.S. state seeks to revive its dwindling energy industry.

Alaska LNG is designed to carry natural gas from fields in the North Slope through an 800-mile (1,287 km) pipeline to south central Alaska for in-state use and to a liquefaction plant to produce up to 20 million tonnes of LNG per year for export.

Tokyo Gas, which purchases about 14 million tonnes of LNG a year, plans to talk with AGDC on details of the possible purchase of LNG, including volume and length, a company spokesman said, adding such an action reflects its efforts to widen its supply sources.

Asked whether Tokyo Gas plans to invest in the project, the spokesman said: “We don’t deny or confirm possibility of such an investment. Nothing has been decided at the moment.”

Alaska created AGDC in 2010 to build the project to tap the North Slope gas reserves, where production is expected to average about 3.5 billion cubic feet per day, according to Alaska LNG’s website.

Reporting by Yuka Obayashi; Editing by Christian Schmollinger