The Alaska Industrial Development and Export Authority (AIDEA) has signed a concession agreement with project development firm MWH, marking a step forward for the Interior Energy Project. The agreement creates the legal framework for the ownership, development, financing, construction and operation of a liquefied natural gas (LNG) plant on Alaska's North Slope, and allows the parties to move forward on completing the final design of the plant and the financial structure of the project, based on a public-private partnership. AIDEA is to own the plant and MWH subsidiary Northern Lights Energy LLC is to build, operate and maintain the facility. Northern Lights would also have the right to sell LNG the plant produces. A gravel pad for the LNG plant was recently completed. The Interior Energy Project was introduced by Gov. Sean Parnell in the 2013 legislative session. The 28th Alaska Legislature advanced the project with the passage of SB 23, which contains a financing package that enables AIDEA and the private sector to partner in the construction of an LNG facility on Alaska's North Slope and a natural gas distribution system in Fairbanks and North Pole (see Daily GPI, Aug. 26, 2013; Jan. 17, 2013). A large-scale pipeline and liquefaction export to commercialize North Slope gas also is advancing (see Daily GPI, Sept. 19).
W&T Offshore Inc. has acquired a 35.7% working interest (WI) in the Fairway Field and associated Yellowhammer gas processing plant, giving it 100% WI in both assets. The adjusted purchase price at closing was $18.2 million, plus assumption of asset retirement obligations. The seller was not disclosed. The Fairway Field is in the shallow state waters of Mobile Bay, AL; the Yellowhammer plant is onshore in Alabama about 17 miles northwest of the field. Average gross production in July was 36.9 MMcf/d and 1,477 b/d of natural gas liquids. W&T's internal estimates of proved reserves associated with the acquired property are 27.3 Bcfe, of which 74% is natural gas. "Our original acquisition of a 64.3% interest in these two assets in August 2011 [from Shell Offshore Inc. (see Daily GPI, Aug. 12, 2011)] has provided a substantial return on our earlier investment," said CEO Tracy Krohn. "These quality, long-life properties continue to generate substantial cash flow and have identified upside potential. This transaction is expected to be immediately accretive on the basis of both cash flow and production metrics."
Pivotal LNG Inc., a unit of AGL Resources has struck a long-term agreement to sell liquefied natural gas (LNG) to Crowley Maritime Corp. subsidiary Carib Energy LLC for use by Carib's customers in Puerto Rico. The Federal Energy Regulatory Commission recently issued an order providing clarity to Pivotal regarding the use of non-pipeline transportation for delivery of LNG from the U.S. mainland to U.S. territories without becoming subject to Commission jurisdiction. The FERC order confirmed that Pivotal can sell LNG designated to be transported by waterborne vessel to all U.S. territories subject to the order's conditions. Pivotal said it will load LNG onto international shipping organization (ISO) containers to be transported via truck to Crowley's waterborne vessels in Jacksonville, FL, and then delivered to Carib's customers in Puerto Rico. The U.S. Department of Energy recently issued Carib non-free trade agreement export authorization for its terminal project on the Louisiana coast (see Daily GPI, Sept. 10).