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AGDC takes Spur reroute questions in Nikiski

Shaylon Cochran/KDLL


The Alaska LNG plant in Nikiski won’t be built with the Kenai Spur highway on its current path. Monday night, the Alaska Gasline Development Corporation was in town to talk about the options for relocating the Spur and take a few questions.



Worst case scenario for the new Spur highway, 35 property owners would have to relocate. But at least 150 turned out Monday night to hear the latest on the AK LNG project, and what it will mean for the rest of Nikiski. Questions ranged from the practical, like whether it's a good idea to build a garage this spring if only to have the property bought out to make room for the highway, to more nuanced queries about international finance and geopolitics. And the debt that will finance the whole project was another popular topic. Who takes it on, and when? That’s the hinge. Because really, nothing else happens from here unless the plan to get 75% of the project financed through Chinese investors actually comes to fruition.


In exchange for putting up that roughly $33 million, as it’s estimated now, the lenders would get access to 75% of the natural gas coming off the pipeline at a rate and for a length of time yet to be determined. The other 25% would come from other, smaller investors, even individual investors.


Frank Richards is AGDC’s Senior Vice President of Program Management. He says Alaska’s cut is the remaining 25% of the gas coming down the line before it gets liquified and shipped out.

“Alaskans will recieve gas first off from this project. AGDC was created as an entity to provide energy relief to Alaskans. When we were created, it was at a time of high oil prices and folks were smothering under the high cost of that energy.

Right now, there are planned offtake points for Fairbanks, the lower Susitna Valley and in Nikiski, where it would get plugged into the Enstar system. But, Richards says, there could be more.

“But we also have opportunities along the highway...where we could easily build offtake points for communities, for resource developers, as long as it’s economically viable.”

Economically viable. It’s taken some work just to keep the project economically viable to this point. A few years ago, cost estimates ranged as high as $60 billion. The new strategy under AGDC’s direction has been keeping costs as low as possible. Some say unrealistically low.


Which brings us back to the Kenai Spur reroute. Of course, the biggest question is why not put the highway out where it doesn’t bother anyone. Because that would be prohibitively expensive. As would reworking a portion of Miller Loop, because whatever gets built, will eventually be handed off to the DOT, so it has to meet those specifications, plus federal regulations as part of the national highway system.


Richards says they hope to have investors signed on by June. Then more talks can start about buying up more property. But they’ll also be back in Nikiski at the senior center next week.