An executive order signed recently by Alaska’s governor is intended to set in motion work on a liquefied natural gas (LNG) project that would liquefy gas from the state’s North Slope for tanker export to international markets.

Any such project would be dependent upon the development of a gas pipeline to tap the North Slope reserves, something which both TransCanada Corp. and a producer consortium known as Denali are working toward independently (see Daily GPI, Aug. 5).

“An LNG project would focus on liquefaction facilities and facilitating agreements between LNG buyers and natural gas producers, and could also include gas conditioning facilities on the North Slope, pipeline transportation from the mainline to liquefaction, and fractionation facilities at tidewater, as well as the liquefaction facilities,” the order signed Wednesday by Gov. Sarah Palin states.

The state’s Department of Natural Resources and Department of Revenue have been directed to to work with any organization or entity committed to commercializing Alaska’s North Slope natural gas.

“This solidifies our commitment to facilitating an LNG project that is a product of market interest,” Palin said. “By committing both project capital and natural gas resources to a pipeline that would transport North Slope natural gas to tidewater, an LNG project can remain an integral element of the state’s effort to deliver Alaska’s gas to market.”

The two state departments are to provide permitting coordination, fiscal and economic analysis and facilitation of meetings with federal agencies.

Including an LNG liquefaction facility in efforts to commercialize North Slope gas has been called for by a number of parties in the state (see Daily GPI, May 19). Alaska already has one liquefaction plant, which has been sending LNG to Japan since the 1960s (see Daily GPI, April 23; Jan. 4). Proposals submitted under Palin’s Alaska Gasline Inducement Act (AGIA) included projects with an LNG component, notably one from a partnership that included China’s Sinopec (see Daily GPI, Feb. 1; Dec. 17, 2007; Dec. 4, 2007). All of the AGIA proposals but TransCanada’s were deemed incomplete, however, and not given further consideration (see Daily GPI, Jan. 7).

The Denali proposal is generally similar to TransCanada’s, but it is moving forward outside of the AGIA process.

To appease LNG plant proponents, Palin’s gasline team had said it would include consideration of an LNG option in its deliberations on the TransCanada proposal.

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