MSC2-20260410-1200

is that we're not the only West Coast province out there. I shouldn't say province, that's a Canadian term.

West Coast jurisdiction. Because Asia certainly is an enticing market for LNG, not just Europe.

Canada's first LNG export projects started producing last year called LNG Canada,

Kitimat,

British Columbia.

They are taking serious looks at doubling its capacity.

Because they're West Coast,

there's plenty of shale gas in British Columbian and Alberta.

If they go ahead with doubling it,

it would be 40% larger than the Alaska LNG project.

There's a couple other,

well there's actually three other active LNG projects in British Columbia.

Small one in Kitimat.

which has a First Nation as a partner.

They are under construction. They expect to be producing in 2028.

There's a project north of Vancouver called Wood Fiber, odd name for gas until you realize it's on the site of a former pulp mill.

So it was already a messed up polluted site. Who the hell cares?

Put a refinery there.

They are under construction,

expect to be producing in 2027. There's also another one in British Columbia.

hasn't gone to construction,

hasn't gone to final investment decision.

It's about 60% the size of the Alaska LNG project.

It's just across the border from Alaska.

Literally,

it's that far north in coastal British Columbia.

It's that close to us.

They also have a First Nation as a partner.

If you look at what's under construction in Canada and Alaska and Mexico and...

Nigeria, Australia,

elsewhere.

Those projects alone this year and next year will add close to 15% to global supply because they're all betting,

again pre-Iran war,

on increasing demand for AI,

data centers,

electrification,

all the rest.

But they're not that worried because most of them have these long-term contracts for the buyers.

to take the gas or pay for the unused capacity it's the next wave that are starting to rethink things you know are the buyers still there is China their imports of LNG last year dropped 11 percent

There is the lowest level since 2018.

Japan's imports of LNG are lower than what they were the year before the Fukushima nuclear disaster in 2011 as countries are going through renewables, pulling off from fossil fuels. But now what you're seeing with the high prices because of the Strait of Hormuz closure and shutdown of supply there in Asia,

Japan,

South Korea,

Thailand.

China.

This is going back to coal.

The real question for the LNG industry is, had the high prices and the supply uncertainty,

you know, this year it's Qatar and Iran and Strait of Hormuz, maybe that gets solved.

Maybe the solution lasts for three years. What happens next time they close?

You're seeing countries,

particularly in Asia and also Europe,

thinking,

you know, maybe I'm counting on...

Energy imports too much.

Maybe coal's not so bad.

Maybe nuclear's not so bad after all.

I need to accelerate renewables. There's a power company in Vietnam who had approval from the government to put in a gas-fired power plant run by imported LNG.

They just asked for permission to say to the government, can we scrap that and go off renewables?

This tying our future to LNG is just too risky for us. The...

Director of the International Energy Agency commented,

high energy prices will lead governments,

industries and households to look at other options.

You had the head of the European Union saying,

you know, maybe trashing nuclear like we did here was a mistake.

So as you think about LNG, and this is my last comments,

you know, going ahead.

It was this growing industry,

growing demand,

gas is cleaner than coal,

no question about it.

But coal is a more certain supply and it's cheaper.

And certainly nuclear, once you choke on the capital cost and overcome the worries of another meltdown, it's dependable. It's in your country.

Renewable is certainly in your country.

You read more and more, Washington Post today had a story saying...

Maybe the long-term effect of the Iran war on the Strait of Hormuz is going to be to undercut the LNG export industry.

No one knows,

right?

It's just pick a consultant, they'll give you a different view.

But it's a real concern out there.

Certainly the U.S. in a way, well,

the U.S. is a more stable supplier than Iran.

certainly, or other Persian Gulf countries. But U.S. has its own political issues which has turned off a lot of people. So

I got time for questions. Got to be some questions.

Yes, are there any questions?

Yeah, I got one back here.

Yeah.

Yeah.

Great.

Great.

We were talking about um the fact that LNG doesn't have the same kind of spot market that oil does.

Um

But I see the JKM spot price listed quite often.

Is it just, it's obviously a thing. Is it just not as big a factor compared to oil?

Yeah, so JKM is Japan, Korea marker. It's something Standard & Poor's puts out.

But it's an average of what prices are in Japan,

Korea at that moment.

But I don't think you can...

Right.

Right.

Okay.

It's an average.

And then keep in mind those long-term contracts are tied for oil is different than the spot market.

So the spot market, there's some LNG going for $28 per million BTU, which means a tanker is close to $100 million with a gas.

But if you have a contract that's based on the percentage of oil on a five-year average,

then you've got four and a half years of low oil prices and half of your height,

you're happy with your long-term contract.

Suppliers, you know, buyers will sort of mix long-term different um factors so they're not beholden to just one bed. Like diversifying your investment portfolio.

Yeah.

So maybe you can comment on the um what we're seeing in the rapid increase in renewables and battery storage capabilities,

especially battery storage and how that might affect

the potential oversupply of LNG.

You know, if I knew, I would invest my money.

If you're going to store energy,

you've still got to produce it somewhere.

Is it wind?

Is it solar?

Is it hydro?

But it is changing things. The higher capital cost, but then...

lower costs going out. I mean, I don't know. I don't think anybody knows.

Other than it's an option that people are looking at more because that steady uninterrupted stream of energy from the Persian Gulf is no longer seen as uninterruptible.

For Alaska, how do the economics of tank rating LNG off the North Slope compare to doing an in-state pipeline?

Well, you still got to produce the LNG, so you still got to clean it, but you don't have to build a $10 or $15 billion pipeline,

of course, but you need more expensive LNG tankers because of the ice, you need an escort fleet of icebreakers, so you save on pipe, you spend more on ships,

and there's some times of the year when no matter how much icebreaking capacity you have,

you're still going to be locked in.

and certainly environmental considerations of putting a factory on the North Slope. And to get out to deep water where you can load tankers because the North Slope is so shallow up there,

you have to go miles offshore.

So it's a lot of buried pipe hoping it never gets scoured by ice flows.

So it's cliché is not a slam dunk,

but you do avoid the pipeline cost.

Of course it means Fairbanks doesn't get gas,

but that's a political issue.

What about the Jones Act?

Right, so the Jones Act is an old federal law. You cannot use a foreign ship.

So without a Jones Act waiver,

unless someone builds an LNG carrier,

you'd have to use foreign carriers on their slope. If they go to Asia, they couldn't bring the stuff back to South Central,

to Nikiski. You either need a waiver of the Jones Act or build an LNG carrier.

No LNG carrier has been built in this country since the 70s.

And even then it had federal subsidies.

Because God will subsidize anything through jobs.

That's our that's our alarm.

Okay.

We are at the end.

So Larry is around all

Yeah.

the time and he loves to answer questions. So call him up, bring him into your office.

He would love to answer your questions.

Thanks for coming.