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State of Alaska Taking Over Pipeline, LNG Project From Producers

The Alaska Gasline Development Corp. (AGDC), a state entity, is taking over the technical and regulatory activities associated with a pipeline and liquefied natural gas (LNG) terminal project that would commercialize Alaska's North Slope natural gas.

AGDC and affiliates of ExxonMobil Corp., BP plc and ConocoPhillips have concluded agreements that will enhance AGDC's ability to progress an LNG export project to commercialize North Slope gas, AGDC said Friday.

Last summer, the producers -- which had been responsible for moving the project forward --told the state that it was no longer economic when compared with other LNG liquefaction projects around the world. Gov. Bill Walker since taking office has been an advocate of greater state participation in the project. However, detractors in Alaska and elsewhere are skeptical that the state can advance the project.

The producers and AGDC completed all of the pre-front end engineering design (FEED) deliverables and the FERC draft environmental and socioeconomic resource reports for the project. The parties have spent more than $500 million on an Alaska LNG project. AGDC now takes over.

"AGDC plans on completing the Federal Energy Regulatory Commission pre-filing process, building upon the draft environmental and socioeconomic resource reports prepared by the parties during pre-FEED," it said.

The Alaska LNG Project proposed facilities include a liquefaction facility in the Nikiski area on the Kenai Peninsula, an 800-mile large-diameter pipeline, up to eight compression stations, at least five take-off points for in-state gas delivery, a gas treatment plant located on the North Slope and transmission lines to transport gas from Prudhoe Bay and Point Thomson to the gas treatment plant. The project is designed to export up to 20 million metric tons of LNG per year.

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