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Alaska Gasline Open Season Includes LNG Option

The Alaska Pipeline Project (APP), a venture of TransCanada Corp. and ExxonMobil Corp., is holding a nonbinding solicitation of interest for capacity on a potential pipeline to carry Alaska North Slope gas.

The project was originally envisioned as delivering gas to Canada and the Lower 48 states for North American consumption. However, the shale gas boom has flooded the North American market with gas. Now a home for Alaska gas in the form of liquefied natural gas (LNG) could be sought in Asian markets, something a number of pipeline watchers have been saying was the right destination for years. In May the state officially turned its attention to an LNG solution in the effort to find markets for its gas (see NGI, May 7).

One proposed route would run from Point Thomson through points near Prudhoe Bay, Fairbanks and Delta Junction and then to the Alaska-Canada border where the pipeline would interconnect with a new pipeline in Canada that would extend to an interconnection point at or near the British Columbia-Alberta border. From there the gas could access North American markets, including the Lower 48.

The LNG option would include a pipeline from Point Thomson through points near Prudhoe Bay and Fairbanks and then to an interconnection point, via alternative routes, with a third-party LNG terminal at a tidewater location in Southcentral Alaska. From there LNG cargoes could access markets around the globe, the project backers said.

Weeks ago the Alaska Gasline Port Authority (AGPA) filed seeking authorization to export up to 2.5 Bcf/d (19 million metric tons per year) of LNG over a 25-year term to countries along the Asian-Pacific Rim with which the United States has or establishes a free trade agreement (FTA) (see NGI, July 23). AGPA is counting on APP to carry gas to its proposed facility for liquefaction.

AGPA -- a political subdivision of the state of Alaska whose members include the Fairbanks North Star Borough and the City of Valdez -- joins a host of others that have sought FTA export permission from the U.S. Department of Energy's Office of Fossil Energy (see NGI, July 9; June 25). Such applications are routinely approved as export to FTA countries is presumed to be "consistent with the public interest" under the Energy Policy Act of 1992.

The APP solicitation of interest runs from Tuesday through Sept. 14 and is being conducted in accordance with the Alaska Gasline Inducement Act (AGIA), which requires TransCanada, as the AGIA licensee, to assess market interest in a pipeline system for Alaska North Slope gas every two years after its first open season.

APP has set a high priority on providing access opportunities for in-state natural gas to heat and power local homes, business and industry, it said. All options being pursued under AGIA provide for a minimum of five delivery points for local natural gas connections in Alaska. For more information, visit www.thealaskapipelineproject.com.

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