Alaska is pursuing federal funding and partnering with a private firm to jumpstart a long-simmering pipeline project to export North Slope natural gas.
Tim Fitzpatrick, spokesman for the state-owned Alaska Gasline Development Corp. (AGDC), told NGI that Alaska aims to begin the first phase of the state’s liquefied natural gas (LNG) pipeline and export plant by partnering with an as-yet unnamed private firm and by applying for federal pandemic stimulus and infrastructure funds.
AGDC may also seek defense funding because a large military installation in the state would be able to switch from coal to natural gas if the project is completed, Fitzpatrick said. AGDC anticipates that federal funds would cover approximately 75% of costs of the first phase, he said, with the private partner paying the rest and taking the lead on the project once funded.
AGDC said it and the private firm would build a $5.9 billion natural gas pipeline from the North Slope to Fairbanks. It would span about 500 miles and could begin delivering gas to the Fairbanks area by 2025, AGDC said.
Frank Richards, AGDC president, said that by breaking the project into phases, AGDC hopes to complete the key first portion of the pipeline largely with federal investments. With that work underway, he said, the overall project would gain momentum and likely be viewed as lower risk, opening a door for more private investments to complete the overall project.
“We’re calling strategic parties right now,” Richards told NGI. “That’s ongoing.”
Richards noted that the first phase of the project would create an estimated 1,400 direct construction jobs.
The total Alaska LNG project has an estimated cost of $38.7 billion. Plans call for three liquefaction trains with capacity of 20 million metric tons/year (2.55 Bcf/d), 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.
Richards said AGDC hopes to complete the full project by 2030.
The Alaska LNG export facility is one of a few under development on the West Coast of North America, which is geographically well-situated to serve Asia, a lucrative market for U.S. LNG exports. Asia is expected to be a lead driver of growth in global natural gas consumption for much of this decade.
Asian demand for U.S. LNG has been particularly robust this winter.
LNG exports exceeded gas delivered via pipeline by nearly 1.2 Bcf/d in November, marking only the second time since 1998 that had happened. Demand from Asia for the super-chilled fuel mounted ahead of winter and intensified in December and January amid extended bouts of freezing temperatures.
LNG feed gas volumes increased in both December and January, NGI data show, as Asian demand further intensified amid the onset of a particularly harsh stretch of cold temperatures.EIA estimated that U.S. LNG exports would average 9.8 Bcf/d this month, on par with January’s record level. In its January Short-Term Energy Outlook, the agency forecasted that U.S. LNG exports would average 8.5 Bcf/d over 2021 and climb to 9.2 Bcf/d in 2022.
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