AK LNG

The Alaska LNG project would take natural gas from the North Slope of Alaska down to a proposed plant on the Kenai Peninsula, in Nikiski, where it would be liquified, shipped out and sold. 

The gas is already pumped out of the ground on the North Slope. But it isn’t currently sent to market. 

To get it there, the state wants to construct an 800-mile pipeline. And last year, it got the go-ahead from environmental regulators, under then-President Donald Trump, to build the massive project.

But now the Biden administration wants to take another look.

The Alaska LNG Project has been stalled for years, but the Alaska Gasline Development Corporation is hoping a new, lower cost estimate will make it more competitive.

The corporation released the revised cost estimate during a board meeting on Thursday. The new estimate sits at $38.7 billion, about $5.5 billion less than the previous estimate, which was done in 2015. The new estimate was put together by AGDC with BP, ExxonMobil, and Fluor Corporation, a consulting company with experience in LNG.

Since the state announced Nikiski as the chosen site for its liquefied natural gas plant project about six years ago, Kenai Peninsula residents have had an ear to the ground for developments. The project would use an 807-mile pipeline from the North Slope to deliver natural gas to a plant in Nikiski, where it would be liquefied and shipped out to international markets, all for a price tag of about $45 billion.

Since 2017, the state has been heading up the project alone through the Alaska Gasline Development Corporation. The project partners, including ConocoPhillips, BP and ExxonMobil, shied away from it after a number of international LNG plants came online, pushing down prices and making Alaska’s project too expensive to be competitive. But the state has pressed on, gathering permits and information. On Thursday, the Federal Energy Regulatory Commission gave the state the green light to build and operate the project.

Now it’s just a matter of how to pay for it. This is the last year the state is going to go it alone —it’s either find other sponsors or sponsors or sell the assets.

It’s been two years since the Municipal Advisory Gas Project Review Board met. The group was formed in 2014 by former Governor Sean Parnell to give cities along the planned 800-mile route of the AK LNG line a voice in how the project is developed. And now, with a new administration in Juneau and a busy 2019 planned for the gas project, the group could be getting back together, and potentially with a new member.

With a new administration set to begin work in Juneau next month, state leadership for the AK LNG project is beginning to change, too.

The AK LNG project got a slight boost from federal regulators this week. The Federal Energy Regulatory Commission, or FERC, will release its draft environmental impact statement a month ahead of schedule, in February next year.

Nikiski is identified as the best terminus for the Alaska Liquefied Natural Gas Pipeline Project submitted by the Alaska Gasline Development Corporation to the Federal Energy Regulatory Commission, and the Kenai Peninsula Borough wants to keep it that way.

At its meeting Tuesday, the borough assembly gave the administration the green light to apply for intervener status with the Federal Regulatory Commission as it considers AGDC’s AK LNG project. Having the status to intervene means the borough can weigh in on the project proposal with FERC. The deadline to apply to intervene is long past — May 1, 2017 — but the borough didn’t think that step was necessary at the time.

Now, though, other municipalities in the state are telling FERC the terminus should be somewhere other than Nikiski. John Quick, borough Mayor Charlie Pierce’s chief of staff, says the borough wants to be able to counter those claims.

The AK LNG project seems to be picking up some steam. A former partner in the project, BP, came back aboard last week with an agreement to supply North Slope gas to the 800-mile trans state pipeline.

The Alaska Gasline Development Corporation has extended the public comment period for the Kenai Spur Highway rerouting project.

The state may have a new dance partner for the AK LNG Project. Governor Bill Walker tweeted over the weekend about meetings he had with the heads of some North Slope producers.