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Alaska Pipeline, LNG Project Filed at FERC

The Alaska Gasline Development Corp. (AGDC) on Monday filed its Natural Gas Act Section 3 permit application with FERC for for the Alaska LNG Project, a pipeline and natural gas liquefaction project that would commercialize Alaska’s stranded North Slope gas reserves.

The Federal Energy Regulatory Commission is expected to soon publish a schedule for the National Environmental Protection Act review for the project in the Federal Register. The schedule will outline the timeline for a draft environmental impact statement (EIS), expected to be about 12 months, and a final EIS, expected about six months later.

Alaska LNG is composed of a gas treatment plant at Prudhoe Bay, an 800-mile pipeline to Southcentral Alaska with up to five offtakes for in-state use, and a natural gas liquefaction plant in Nikiski to produce liquefied natural gas (LNG) for export.

“Today’s FERC filing marks a major milestone in moving the Alaska LNG project forward,” said AGDC President Keith Meyer. “This is the culmination of over one million man hours invested in project engineering and design, more than 193,000 acres mapped, over 300 streams surveyed, thousands of boreholes drilled along the proposed route, and approximately 50,000 pages of material submitted to FERC.”

The project would give market access to 35 Tcf of proven gas resources stranded on the North Slope. AGDC, a state of Alaska entity, anticipates 9,000-12,000 jobs for design and construction plus 700-1,000 jobs for long-term operations.

The gas pipeline would provide Alaskans with access to natural gas for residential and industrial use. Additionally, the liquefaction plant would be authorized to process 20 million tons of LNG per year for export, which would provide revenue to the state for generations, AGDC said.

AGDC also filed permit applications with four additional federal agencies: the Pipeline and Hazardous Materials Safety Administration, Army Corps of Engineers, Bureau of Land Management, and National Marine Fisheries Service.

Late last year AGDC took over control of the project from major producers ExxonMobil Corp., BP plc and ConocoPhillips, which had said the project had become uneconomic.

Last Saturday Vice President Mike Pence met with Alaska Gov. Bill Walker and Meyer on his way to Asia. “Our meeting was a perfect precursor to the vice president’s trip to Asia,” Meyer said in a statement. “Over the coming days, Vice President Pence will meet with leaders in South Korea as well as Japan -- two primary markets for Alaska LNG. Trade partnerships will be a primary discussion topic.”

On April 7, President of the People’s Republic of China Xi Jinping met with Walker and Meyer, and other state representatives. China is Alaska’s largest trading partner, importing more than one-quarter of the state’s exports. According to AGDC, Xi mentioned the large scale of Chinese need for natural gas, saying his country has “100 years of demand.” Meyer replied, “Alaska has 100 years supply,” iterating Alaska is the ideal partner to help China meet its energy needs.

Last month Walker told President Trump in a letter that Japan "looks very favorably" on importing LNG from Alaska and said the federal government can assist the state "in bringing this important American infrastructure project to fruition." Trump has said U.S. infrastructure development is a key priority of his administration.

Much has yet to be decided about the Alaska LNG project, including the ultimate route the pipeline might take. Last February the city of Valdez, and mayors of the Fairbanks North Star Borough, city of Fairbanks, and city of North Pole, along with the Alaska Gasline Port Authority told FERC that regulators are obligated to consider their preferred "Valdez alternative." The alternative route would bring the pipeline closer to their communities -- providing more readily available access to gas -- and would site the LNG liquefaction and export terminal at Valdez instead of Nikiski.

In a subsequent filing at FERC, made last week, the city of Valdez continued to argue for its preferred route, this time citing a recent natural gas leak in Cook Inlet involving a Hilcorp Alaska pipeline. The recent repair of the leaking pipeline was delayed and made more difficult by sea ice in the inlet. “...[T]hese comments address the environmental and economic risks of the Nikiski [pipeline route] alternative in light of the recent leaks in seafloor pipelines in Cook Inlet and the difficulties encountered in trying to repair the leaks,” Valdez told FERC in its most recent filing [PF14-21].

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