A Texas company said Thursday it’s in “advanced discussions” with local utilities in Southcentral Alaska to develop a floating liquefied natural gas import terminal in Cook Inlet. The news is the latest development in the region’s race to stave off a looming shortfall of Cook Inlet natural gas.
The announcement came during Excelerate Energy’s Inc. second quarter earnings call. During that call, the company said an integrated LNG terminal would boost declining gas reserves in Alaska and bring energy security to Southcentral amid looming shortages.
“With domestic gas reserves in the Cook Inlet area declining, the region will need to import LNG to meet its anticipated local natural gas needs from 2028 onwards,” Excelerate Energy’s Vice President Craig Hicks Jr. told investors and analysts on the call. “Excelerate is in advanced discussions with local utilities in Southcentral Alaska for the development of an integrated LNG terminal in the lower Cook Inlet region.”
The company is proposing what’s called a floating storage and regasification unit. Those are moored to a docking facility. It can offload, vaporize and deliver liquefied natural gas from on land or offshore. Excelerate says the floating units are more cost-effective than land-based units and can be rolled out more quickly — in 1-3 years, rather than 4-6.
“Excelerate would own the FSRU base terminal, source LNG supply as required and sell gas to local utilities and other offtakers,” Hicks said.
Excelerate’s proposal is just the latest in a throng of ideas being suggested as a way to stabilize Southcentral’s natural gas supply. Hilcorp, which produces the vast majority of gas in Cook Inlet, warned energy utilities in 2022 that it would not be able to fill existing natural gas contracts without new development in the Cook Inlet basin.
Excelerate Energy, a publicly traded LNG infrastructure company based in The Woodlands, Texas, currently operates 11 floating units worldwide. At the same time it announced plans for development in Alaska, Excelerate said its planning a similar floating unit in Haiphong, Vietnam. The company says Vietnam is one of Asia’s fastest growing economies and has a need for LNG as domestic production declines.
If it builds a floating terminal in Cook Inlet, that wouldn’t be the first time Excelerate Energy has looked to set up shop in Alaska. The company proposed an LNG export facility in Valdez more than ten years ago. At the time, it proposed sending gas to Hawai’i.
In a statement sent Thursday to KDLL via email, Excelerate said southcentral’s local utilities will need to import LNG to augment local gas supplies to meet future natural gas demands beyond 2028. The company said its proposal is a bridge to support utilities transitioning to a “renewable future.”
It’s unclear which Alaska utilities are involved in the talks with Excelerate. The company told KDLL its discussions are confidential.
A spokesperson with Southcentral gas utility Enstar, Lindsay Hobson, said via email that the company “cannot comment on specific projects due to ongoing commercial negotiations.” She said the company continues to engage local producers and importer.
“If and when any commercial discussions are finalized, Enstar will file agreements with the Regulatory Commission of Alaska for approval and share that information with Alaskans,” she said.
Enstar Natural Gas has taken steps this summer to build a $57 million pipeline to import natural gas. The company secured approval for the project from the Regulatory Commission of Alaska last month.
Excelerate says it’s planning to open the floating gas import terminal in 2028.
