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Most Likely Site Chosen for Alaska LNG Export Project

If a project to liquefy and export Alaska's North Slope natural gas is constructed, the liquefaction plant and terminal most likely will be on the Kenai Peninsula, the producer trio and pipeline company involved in the project said Monday.

ExxonMobil Corp. BP plc, ConocoPhillips and TransCanada Corp. selected a site in the Nikiski area on the Kenai Peninsula after evaluating more than 20 locations based on environmental, socioeconomic, cost and other project-related criteria, they said.

"This is a step forward for the Alaska LNG project and shows continued progress toward building Alaska's energy future," said Steve Butt, senior project manager. "The work that we have put into the site selection process gives us confidence that the Nikiski site is the lead location for the LNG plant and terminal. The Nikiski site also results in a pipeline route that provides an access opportunity to North Slope natural gas by the major population centers in Fairbanks, Mat-Su Valley, Anchorage and the Kenai Peninsula."

Last fall the producers and TransCanada outlined their plans for LNG export after the state of Alaska opted to pursue an LNG option rather than piping Alaskan gas to the Lower 48, where shale plays have saturated the gas market (see Daily GPIOct. 5, 2012).

Since then, the state has been courting LNG buyers in Asian markets while buyers have been on the hunt for supplies in Alaska, Canada and elsewhere (see Daily GPISept. 25Sept. 13). However, Japan and other countries have multiple options for sourcing LNG, and Alaskan interests have felt a sense of urgency to move a project forward or be shut out of the market (see Daily GPIJune 3).

However, a project to pipe and then liquefy North Slope gas still requires much work. A number of engineering, technical, regulatory, fiscal, commercial and permitting issues still need to be resolved as work on the potential $45- 65-plus billion project progresses, the producers and TransCanada said.

"While Nikiski is the lead site, the project team continues to consider other secondary locations. Pipeline routing definition work also continues based on the project summer field work activities, which will be extended south of Livengood," they said.

The companies are still refining the project concept, which includes a gas treatment plant on the North Slope, an 800-mile, 42-inch diameter pipeline with up to eight compression stations and at least five offtake points for in-state gas delivery, and a liquefaction plant and terminal. 

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