The new head of the Alaska Gasline Development Corp. (AGDC), who is steering a liquefied natural gas (LNG) export project, reportedly has told lawmakers the state-owned corporation may be dissolved if the project is determined to be unfeasible.
Meanwhile, FERC said it needs an additional four months to complete an environmental impact statement (EIS) for the Alaska LNG project. The Federal Energy Regulatory Commission, which released a schedule last August that identified Nov. 8, 2019 as the final date to issue an EIS, last Friday said it now expects to issue one on March 6, 2020. A final order would be issued by June 4, 2020 [CP17-178].
According to media reports, AGDC President Joe Dubler told a Senate Finance Subcommittee panel that the corporation was winding down its activities. He told members of the Senate Commerce, Community and Economic Development, which holds AGDC's purse strings, that a corporate office in Houston has been closed and the main office in Anchorage is in the process of being consolidated.
AGDC ousted Keith Meyer as president in January and appointed Dubler to lead the corporation on an interim basis. Three days before the shakeup, Republican Gov. Mike Dunleavy named four members to AGDC's seven-member board.
Dunleavy wanted the state “to focus on was the Alaska LNG Project to determine if the larger project with the export capacity could meet economic hurdles without undue execution risk," Dubler said at the meeting in late February, according to the Anchorage Daily News. "If it is [viable], we're going to solicit world-class partners for front-end engineering and design and completion of regulatory efforts.
"If we do all of our work and we determine that the project does not look like it's going to be viable, we will wind the project down, close the corporation up and return all the current funds that remain to the General Fund."
As designed, Alaska LNG would include a three-train liquefaction plant in Southcentral Alaska at Nikiski, an 807-mile, 1.1 meter diameter gas pipeline, a North Slope gas treatment plant, and interconnecting facilities to connect the Prudhoe Bay gas complex to the gas treatment plant. The project is estimated to cost $43.4 billion and could export up to 20 million metric tons/year (mmty).
AGDC took control of Alaska LNG from ConocoPhillips, ExxonMobil Corp. and BP plc in 2017, after the producers determined it was no longer economic when compared to other LNG projects around the world. Prospects for Alaska LNG have also dimmed as other projects, including the LNG Canada project in British Columbia, which has been sanctioned.
Despite the ongoing U.S.-Sino trade war, AGDC and three Chinese companies agreed in January to extend the deadline for a joint development agreement until June 30. AGDC has pledged to reserve 75% of the LNG production capacity (15 mmty) for China's Sinopec. Besides China, AGDC has also been in negotiations with potential LNG buyers in Japan, South Korea and Vietnam.