After the Wave Pt. 4: Harnessing Alaska's Natural Gas

For more than 40 years Alaska supplied Japan with Cook Inlet natural gas. It was the boom in the early 1970’s that helped build jobs and create growth for hundreds of people on the Kenai Peninsula.

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by Megan Mazurek

Tokyo, Japan - For more than 40 years Alaska supplied Japan with Cook Inlet natural gas. It was the boom in the early 1970’s that helped build jobs and create growth for hundreds of people on the Kenai Peninsula.

Japan’s energy policy is evolving and it’s looking for more oil and natural gas supply to get them through the next 10 years. It’s a timeline Alaska could benefit from not only because of our long-time partnership but because of potential projects on the state’s horizon.

Its size and dimension is deceiving, but after climbing the tank at the Ohgishima LNG terminal, there’s no doubt it’s the largest LNG tank in the world; built underground to prevent risk caused by large earthquakes.

Welders and inspectors work to make sure the membrane can store up to 250,000 kiloliters of LNG, and they don’t get a second chance. When the tank is sealed it won’t be reopened for another 50 years.

"Tokyo Gas first began building underground tanks in the 70's and from then we've been constructing 10-200,000 kiloliter tanks,” said Mr. TSUTSUMI Yoichi, a civil engineer, Tokyo Gas Company. “We have a lot of experiences and there's always been a new challenge. There is always pressure but we are confident we have the knowledge, expertise and long standing experience to continue building infrastructure successfully."

Japan is the world’s fifth largest importer of natural gas, and Tokyo Gas Co. is leading the charge supplying energy for 10 million customers in the metropolitan area.

"Currently we have contracts with 6 different countries,” said Mr. SATOSHI Tanazawa, GM Strategy, Tokyo Gas Company. “There are 11 projects underway that are under contract. In the future, we would like to add more short and midterm contracts."

Up until last year millions of Tokyo residents used Alaska’s gas to heat their homes, now they rely on other countries like Malaysia, Indonesia, Australia, Brunei, Qatar and Russia.

Tokyo Gas Co. is looking to renew a contract with the U.S. and is also looking at other countries like East Africa.

“The LNG project with Alaska was for more than 40 plus years and it's always been very stable which I'm very grateful for, Japan benefited greatly from Alaska's LNG,” Satoshi said. “Introduction of LNG to Japan was groundbreaking, in the future I'm sure what we've built upon will be a great benefit for rebuilding the relationship in the future."

Prices, length of contract everything depends on the market and with volatility in the Middle East, Tokyo Gas Co. isn’t the only company looking elsewhere for a stable supply.

"Security and economics are most important,” said Mr. SHIMIZU Sunichi, president and CEO, REI. “So that's why we suggested Alaska."
Resources Energy Incorporated, REI, is a consortium of Japanese companies studying Alaska’s LNG and how best to get it to Japan.

Four companies are financially backing a feasibility study to see where
the best location would be for a liquefaction plant, Valdez and Nikiski are both on the table.

“We're trying to finish up by the end of March, but because our agreement with the state of Alaska was delayed we had a bit of a slip,” Shimizu said. “We're now aiming for the April."

Top producers in Alaska have come together on the details of an instate gas line concept, pre-engineering has been benchmarked for spring.

Shimizu and REI are working on the other end to make sure it’s Japan that gets a portion of North Slope gas, if and when, the pipeline is built.
“As you know Alaska is very new to us,” Shimizu said. “Unfortunately your successful history for over 40 years LNG supply to Tokyo is not very well known to Japanese energy industries."

Japan’s window of market demands is 2017-2019, and REI is committed to financing a liquefaction plant to help speed up the process. It’s a similar timeline that’s been expressed by the Governor.

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