Japanese company inks deals in pursuit of natural gas

Resources Energy Inc., the Japanese company interested in developing a large liquefied natural gas project, has signed several agreements to explore business relationships in Alaska.

The agreements are all nonbinding so far except for confidentiality provisions. They include two Alaska Native regional corporations, an Alaska telecommunications company and Cook Inlet natural gas producers, according to Mary Ann Pease, a vice president with Resources Energy Inc.

Agreements have also been signed, which are confidential, with Cook Inlet explorers and producers including ConocoPhillips, Cook Inlet Energy Inc., Buccaneer Energy and NordAq Energy, Pease said.

ConocoPhillips is currently producing gas in the Inlet and owns the LNG plant near Kenai, which is currently not operating, and is also a major North Slope gas owner. Cook Inlet Energy, Buccaneer and NordAq are exploring for gas, although Buccaneer has a small amount of gas production from onshore wells near Kenai.

An agreement has also been signed with Anadarko Petroleum, also confidential, under which REI and Anadarko will discuss gas prospects in the foothills region of the southern North Slope, where Anadarko is exploring.

A Memorandum of Understanding signed May 16 between REI and Calista Corp., the regional corporation for southwest Alaska, commits the Japanese company to work with Calista on in-state energy and the needs of Calista shareholders, which are hard hit by fuel oil prices.

Calista president and CEO Andrew Guy signed the agreement for Calista. Shun-ichi Shimizu, REI’s president and CEO, signed for the Japanese company.

A similar agreement was signed May 17 with Cook Inlet Region Inc., to explore possible investments by CIRI in the LNG export project REI is proposing. Ethan Shutt, CIRI’s senior vice president, signed for the Anchorage-based corporation, and Shun-ichi Shimizu for REI.

An agreement was also signed by REI with Alaska Communications Systems Holdings Inc., or ACS, to explore possibilities for ACS to provide telecommunications services to REI’s project.

Anand Vadapalli, CEO and president of ACS, signed the agreement along with Shun-ichi Shimizu of REI.

The Japanese company recently completed initial feasibility studies for an LNG plant at either Valdez, the terminus of the trans-Alaska oil pipeline, or Nikiski, the location of ConocoPhillips’ LNG plant.

Toyo Engineering, Air Products Inc. and other firms experienced in LNG projects worked with REI on the feasibility study.

Shimizu, the company president, said that with the feasibility study complete REI’s next task is to assemble a group of Japanese investors in the project, most likely utilities with a need to import LNG.

The goal is to complete that by fall, Shimizu said in an interview.

Support from the State of Alaska for the project is essential in convincing major Japanese utilities to invest, he said.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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