Two massive developments are set to monetize the gas-rich North Slope
ANCHORAGE—The state-owned Alaska Gasline Development Corp. is developing a proposed $43 billion Alaska liquefied natural gas project involving Exxon Mobil Corp., BP Alaska and ConocoPhillips Alaska Inc. In addition, a pipeline expansion once on the back burner, known as the Alaska Stand Alone Pipeline project, is also moving ahead.
“AGDC is advancing two North Slope gas pipeline projects on parallel paths, but only one will be built,” noted AGDC Senior Vice President Frank Richards. “We have avoided duplication of work efforts, and both projects have benefited from data sharing.”
The ASAP project was first proposed in 2010 as a way to deliver natural gas to the state’s major cities and businesses. At the time, Alaska envisioned building a natural gas conditioning facility at the Prudhoe Bay oil field, a 733-mile pipeline down the center of the state and a smaller lateral line to deliver gas to Fairbanks. However, as planning progressed, the state became increasingly involved in a separate plan to export its proven 34 trillion cubic feet of natural gas resources and 200 Tcf of potential resources to Asian customers. Known as the Alaska LNG project, the venture would also make fuel available to in-state customers.
While the Alaska LNG project took center stage, AGDC continued to seek U.S. Army Corps of Engineers approval for the ASAP project to help guarantee a natural gas pipeline alternative for Alaskan communities. Because of the similarity between the two projects, the state has been able to use environmental data gathered for the in-state project to answer questions raised by federal regulators regarding Alaska LNG.
At the same time, AGDC is now seeking funds to move its LNG project forward. The organization hopes to raise $600 million to $800 million through an initial equity offering, expected early next year. Those funds would be used, in part, to pay for advanced engineering and other planning work, as well as for securing the necessary pipe, compressors and other long-lead items the project will require.
The Alaska LNG project would be one of the country’s largest energy projects, encompassing a gas treatment plant on the North Slope, an 807-mile gas pipeline through the center of the state, numerous off-take points for Alaskan communities, and a liquefaction plant and export terminal designed to produce up to 20 million metric tons of LNG each year. AGDC plans to begin construction in 2020 and to ship LNG by 2025.