Taiwan is nearing an investment in the trans-Alaska natural gas pipeline project, officials say

The nation of Taiwan is coming closer to a multibillion-dollar investment in the trans-Alaska natural gas pipeline and is preparing to buy as much as 30% of the pipeline’s production, its economic affairs ministry said Wednesday.

The announcement was short of the firm commitment that President Donald Trump and administration officials announced on Tuesday during a rally in Wasilla but would nevertheless represent a major step forward for the project.

The Alaska LNG project envisions an 800-mile pipeline carrying 20 million metric tons of natural gas per year from the North Slope to an export terminal on Cook Inlet.

Official estimates state that the project will cost between $44.5 billion to $54.5 billion. Unofficial estimates have exceeded $65 billion.

While some gas would be sold in-state as part of the project’s first phase, the second phase calls for most gas to be sold to countries in Asia.

Last year, Taiwan’s state-owned oil and gas company, CPC, signed a nonbinding letter of intent stating that it would like to buy one-third of the gas transported by the pipeline.

Multiple people familiar with ongoing negotiations said Taiwan could sign a document with preliminary sale terms, called a heads of agreement document, as soon as next week. A final agreement on terms would follow in the future. 

Those people asked to not be quoted directly because the negotiations have not yet been finalized.

Trump, speaking Tuesday, told a crowd at Wasilla’s Menard Center that the deal is complete.

“Taiwan is supposed to buy 30% of the gas coming off the pipeline for the next 20 years. That guarantees its success,” he said. “It’s one of the biggest commitments in history to anything. It’s one of the biggest deals ever made.”

On Wednesday morning, Taiwan’s economic affairs ministry said that “after nearly a year and a half of intensive negotiations and careful evaluation, the company has made significant progress with the US developer,” and that it will invest up to $4.4 billion in the pipeline project.

“Specific investment arrangements, equity stakes and related terms will be determined through subsequent negotiations and commercial contract procedures,” the ministry said.

Seventy-five percent of the pipeline project is currently owned by the private developer Glenfarne, and the remainder is owned by the state-controlled Alaska Gasline Development Corp.

Frank Richards, president of AGDC, told the Anchorage Daily News late Tuesday that “negotiations have continued and are nearing conclusion on price and term” for the 6 million metric tons of gas per year that would be purchased by Taiwan.

This week’s announcement follows one earlier this month by the Trump administration, which said South Korea is prepared to invest billions of dollars into the pipeline project.

South Korea’s parliament approved a $350 billion American investment deal earlier this year, but Korean officials said after the Trump administration announcement that the Alaska pipeline is not yet confirmed to be part of the deal.

Its inclusion would be subject to further negotiations and analysis of the project’s economic feasibility, they said.

In an apparent off-the-cuff remark Tuesday in Wasilla, U.S. Commerce Secretary Howard Lutnick said the President had federalized the pipeline project, a term meaning that the federal government is taking over leadership of the project.

On social media Wednesday morning, Trump said the pipeline “is now a U.S. Federal Government Project,” but officials involved with the existing project either deferred comment or said they were unaware of what the Trump administration was planning.

Lutnick, as head of the Department of Commerce, oversees the federal government’s new U.S. Investment Accelerator fund, which was created by Trump last year.

That fund is tasked with spending more than $1 trillion in investment pledges by Japan, South Korea and Taiwan.

The U.S. Department of Commerce did not respond to a message late Wednesday asking if the Investment Accelerator would be taking a lead role in the pipeline project.