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Alaska LNG Files Thousands of Pages in First Round of FERC Resource Reports

Sponsors of the Alaska LNG pipeline and gas liquefaction/export terminal project to commercialize stranded North Slope natural gas on Tuesday filed with FERC the first round of resource reports for the multi-billion-dollar effort.

A dozen separate reports [PF14-21] totaling thousands of pages are in the draft stage (pencil version). Updated data and impact reports (the pen version) could be filed early next year, according to Project Manager Steve Butt's comments to state lawmakers made late last month.

Preparation of the final resource reports, public comments, then a draft and a final environmental impact statement could take a couple of years, running to 2018 before the Federal Energy Regulatory Commission could be ready to decide on the application to build and operate the Alaska LNG project, Larry Persily, the project's federal coordinator, said in a website posting Wednesday.

The sponsors would want FERC sanction of the project before making a final investment decision to proceed and place steel pipe and equipment orders. The sponsors have said construction then could take about five years.

Project participants are the Alaska Gasline Development Corp. and affiliates of TransCanada Corp., BP plc, ConocoPhillips, and ExxonMobil Corp. The parties last year signed a commercial agreement for the project (see Daily GPI, July 3, 2014) They filed for their export authorization with the U.S. Department of Energy in July (see Daily GPIJuly 21, 2014) and received the OK to export to free trade agreement countries.

Project facilities would include a liquefaction plant and terminal in the Nikiski area on the Kenai Peninsula; an 800-mile, 42-inch diameter pipeline; up to eight compression stations; at least five offtake points for in-state gas delivery; and a gas treatment plant to be located on the North Slope (see Daily GPI, May 7).

"With the granting of the authorization sought here, [DOE's Office of Fossil Energy] has the potential to unlock the vast natural gas resources on the North Slope," the applicants told DOE last year in their filing. "Absent granting of the requested export authorization needed to facilitate construction of the project, the ability to meet Alaska in-state gas demand will continue to be very challenging."

Soon, FERC is expected to issue a notice of intent under the National Environmental Policy Act, announcing that the agency is beginning its review of the project and is ready to accept public comments. The Commission is expected to prepare a single EIS, covering all of the issues that multiple federal regulatory and permitting agencies would need to address.

The project -- estimated to cost $45 billion to $65 billion -- has been in its preliminary front-end engineering and design (FEED) phase since last year. The full FEED stage could begin in 2016. Staying on schedule will depend on project economics, mutual agreement by the three main partners -- North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips -- and successful negotiations with the state on commercial agreements and fiscal terms, Persily said. The state and its pipeline partner, TransCanada, are also part of the Alaska LNG ownership team.

Using the draft resource reports as a starting baseline for describing Alaska's environment, FERC expects to hold "scoping sessions" across Alaska in 2015 to listen as government agencies and the public say what they think the EIS should cover and what concerns they have about construction and operations.

Alaska LNG plans field work in 2015 to gather more data for its resource reports and its own project design needs. According to FERC records, that will include geotechnical work in the area of the LNG plant site at Nikiski, geophysical work along the pipeline route and collecting ocean data in Cook Inlet where the pipeline will cross the water to the liquefaction plant on the Kenai Peninsula.

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