Above is the slidedeck used by Alaska Gasline Development Corporation (AGDC) President Keith Meyer at the 38th Annual Resource Development Council (RDC) Alaska Resources Conference on November 16, 2017.
While the entire presentation is of interest, to us the most important part are slides 8-11, discussing the economics of the project. Those economics are based on various assumptions, including, after financing most of the capital cost of the project, that China will be satisfied to continue to pay market price for the delivered LNG. Usually in our experience, a purchaser is willing to bear a substantial part of the cost of a project only when it results in achieving a lower than market price or some other strategic objective, such as increased security of supply over other alternatives. Otherwise, there is no additional benefit that justifies the commitment of their, ultimately limited capital to that project over others.
We intend to delve further into this project in the weeks ahead. For now, however, we simply want to post these slides so that others can start to do so as well.
The slides also are available from the AGDC website, here.