More Progress on Alaska LNG Project
September 08, 2014
Alaska LNG project sponsors filed Sept. 5 with the Federal Energy Regulatory Commission to begin the lengthy environmental and safety review required for federal authorization to build and operate the proposed $45 billion to $65 billion project that includes a pipeline across Alaska and a liquefied natural gas plant at Nikiski. The Sept. 5 filing with FERC requests that the commission "issue authorization for the project no later than July 2018." According to the pre-filing, construction would start 2018-2019 and operations could begin 2024-2025. Governor Sean Parnell welcomed the news and also announced today the State of Alaska and Japan’s Ministry of Economy, Trade and Industry (METI) signed a Memorandum of Cooperation regarding the Alaska LNG Project and other natural resource development opportunities in Alaska. “This agreement is yet another key milestone in the State’s rapid advancement of the commercialization of our world-class North Slope natural gas resources – to Alaskans first and then to markets beyond,” said Governor Parnell, noting that Japan is the world’s largest importer of LNG. Natural Resources Commissioner Joe Balash and METI Agency for Natural Resources and Energy Commissioner Takayuki Ueda signed the agreement on Sept. 8 in Tokyo. “It is an extremely positive development that the government agency that sets Japan’s energy policy and works closely with Japan’s utility market has taken a strong interest in the Alaska LNG Project and the State’s overall natural resources portfolio,” Balash said. The sponsors are North Slope producers ExxonMobil, ConocoPhillips and BP, as well as pipeline company TransCanada and the state of Alaska. The companies estimate a cost of $45 billion to more than $65 billion (in 2012 dollars) for the project that includes a massive plant to cleanse produced gas of carbon dioxide and other impurities; an approximately 800-mile pipeline from Alaska’s North Slope to the liquefaction plant; and an LNG plant, storage and shipping terminal at Nikiski, 60 air miles southwest of Anchorage along Cook Inlet. The project formally entered the Pre-Front End Engineering and Design (Pre-FEED) stage in July, during which the Alaska LNG Project is spending hundreds of millions of dollars on design and engineering and creating hundreds of jobs. Also during this stage, the producers and the State are beginning to engage the LNG sales market. In August Energy Secretary Ernest Moniz exempted the project from a rule that has slowed the approvals for Lower 48 LNG export projects. The preliminary work is estimated at $500 million, with full engineering, design and permitting estimated to cost $2 billion-plus. The memorandum with Japan’s Ministry of Economy, Trade and Industry is part of the State’s ongoing efforts to engage the LNG markets in Asia, and it builds upon an existing agreement the State signed with the Japan Bank for International Cooperation (JBIC) in January. JBIC is a public financial institution that plays a critical role in financing and securing Japan’s LNG imports. The Alaska LNG export project would be among the world’s largest natural gas-development projects.
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