The state sponsor of the proposed Alaska LNG export project has submitted a proposal for an Alaskan hydrogen hub to the Department of Energy (DOE) it says will extend the project’s potential to send low-carbon energy to Asia, reducing global greenhouse gas emissions.

The Alaska Gasline Development Corp. (AGDC) is the latest state agency to vie for up to $7 billion 2021 Bipartisan Infrastructure Law to create regional hydrogen hubs across the country. Using naturally low-carbon gas supplies from the North Slope and carbon sequestration, AGDC is proposing a hub that could produce up to 600 tons/day of carbon-reduced hydrogen in its first phase.

The AGDC is also hoping to attract private investment in its hub by using its proposed Alaska LNG terminal project to secure hydrogen offtake agreements with U.S. and Asian firms. Citing a life cycle analysis and its recently updated federal environmental impact statement, AGDC has claimed Alaska LNG could be the least carbon intensive LNG project in the country.

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“Using Alaska LNG as a springboard for launching the Alaska Hydrogen Hub will generate clean, competitively priced energy, create new high-paying jobs for Alaskans and position the U.S. as a reliable energy partner for our allies overseas,” President Frank Richards said.

If completed, the project would span from the northern shores of the state into the Kenai Peninsula, where gas would be liquefied at the facility in Nikiski. Alaska LNG has had the greenlight from FERC to export 20 million metric tons/year since early 2020. 

Along with using the terminal to export liquefied hydrogen, AGDC outlined opportunities to feed ammonia and hydrogen production near Kenai through the proposed natural gas network planned to supply Alaska LNG.

The agency outlines plans to support the hydrogen hub with up to $850 million in DOE funding and around $3.75 billion from the private-sector, backed by offtake agreements.

Several groups have signed on to support AGDC’s concept, including the U.S. unit of major fertilizer marketer Agrium Inc., the Salamatof Native Association and the University of Alaska. Agrium owns a currently idle ammonia plant near the proposed site of Alaska LNG.

The hub is also backed by a consortium of companies exploring carbon capture, utilization and sequestration (CCUS) projects in Alaska, including ASRC Energy Services Inc., Santos Ltd. and Storegga Ltd.

In early October, a group of U.S. and Japanese firms signed a framework agreement with AGDC to explore ammonia production using renewable energy and CCUS projects around the Alaska LNG project. A few weeks later, Alaskan and federal officials met with a delegation in Japan to discuss the Alaska LNG’s potential benefit to Japanese energy security.

The estimated $39 billion project is still unsanctioned. AGDC has been trying to garner foreign interest in the project since it took over as sponsor in 2016. Affiliates of BP plc, ConocoPhillips and ExxonMobil previously exited the project.