FERC has authorized Alaska Gasline Development Corp.’s (AGDC) plans to liquefy and export natural gas produced on Alaska’s North Slope from a plant at Nikiski.
The liquefied natural gas (LNG) project would consist of liquefaction facilities on the Kenai Peninsula designed to produce up to 20 million metric tons/year (mmty) for export, along with an 807-mile-long, 42-inch-diameter pipeline capable of transporting up to 3.9 Bcf/d to the liquefaction facilities, a gas treatment plant in Prudhoe Bay and two additional natural gas pipelines connecting production units to the gas treatment plant [CP17-178].
“This is a capstone moment for Alaska LNG at the federal level, and it is the result of a robust and comprehensive review process,” said Lisa Murkowski (R-AK), chairman of the Senate Energy and Natural Resources Committee. “A final FERC certificate and order are immensely valuable assets for the project and the state of Alaska.”
The Federal Energy Regulatory Commission approved the authorization motion by a 3-1 vote Thursday, with Commissioner Richard Glick voting against. The chances of LNG projects reaching fruition “are very slim” because of economic conditions, he said.
“Although the Natural Gas Act does not require the Commission to inquire into a proposed prospect’s financial prospects, it is impossible to ignore the fact that the economic fallout from the covid-19 pandemic has made a very difficult market for LNG exports far more challenging,” Glick said.
The Department of Energy previously authorized the project to export 20 mmty to nations with which the United States has free trade agreements (FTA), and also granted conditional authorization for exporting 20 mmty to non-FTA nations.
Alaska LNG has faced its share of hurdles. Last week it was reported that the $43.4 billion project is in search of a new sponsor. The AGDC board reportedly hopes someone else can take over the project if an economic analysis currently underway finds it is still economically feasible. Without another sponsor the state corporation would likely sell the project’s assets, such as permits and engineering work, according to published reports.
Last year, state-owned AGDC signed an agreement with BP plc and ExxonMobil Corp. to collaborate on ways to advance the project, including identifying ways to improve the project's competitiveness and secure FERC authorization to build the project.