The Alaska liquefied natural gas (LNG) project cleared its final federal regulatory hurdle this week after the National Oceanic and Atmospheric Administration (NOAA) authorized the incidental take of marine mammals.
The authorization was issued Wednesday permitting the harm or killing of porpoises, sea lions, seals and whales during a five-year period from 2021-2025 during specified construction activities on the 20 million metric tons/year facility that’s proposed for southcental Alaska at Nikiski. NOAA’s decision authorizing incidental take was the last step that allows the Federal Energy Regulatory Commission, which approved the project in May, to greenlight the start of construction.
The Department of Energy also authorized LNG exports of up to 2.55 Bcf/d last month. But the project has struggled to gain traction in recent years as the global gas market has loosened, a trade war with China has persisted and sponsors have dropped out.
The state’s Alaska Gasline Development Corp. (AGDC) took over as sponsor in 2016 after affiliates of BP plc, ConocoPhillips and ExxonMobil dropped out. BP and Exxon have provided up to $10 million each this year to help fund the permitting process.
However, AGDC laid out plans earlier this year for another sponsor to take over the project as it’s no longer interested in footing the bulk of the bill to shepherd it toward completion. Without another sponsor, the state corporation would reportedly sell the project’s assets, such as its permits and engineering work.
The LNG export facility is one of a few under development on the West Coast of North America, which is closer to Asia, the top LNG market that’s expected to further drive growth in global natural gas consumption in the future. But the loosening market and trade war with China have complicated Alaska LNG’s efforts to secure offtakers.
In order to lure new sponsors, AGDC released an updated cost estimate for the project in June, projecting that it would cost $38.7 million, or $5.5 billion less than its previous estimate. Plans call for three liquefaction trains, an 807-mile pipeline to move gas to the facility, a North Slope gas treatment plant and facilities to connect the Prudhoe Bay gas complex to the treatment plant.
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