The state corporation spearheading an effort to build a $44 billion natural gas pipeline between the North Slope and Nikiski says it is finalizing an agreement with a private company to lead the project.
Alaska Gasline Development Corp. President Frank Richards shared the development during an energy press conference with Gov. Mike Dunleavy on Monday in Anchorage.
“Today, after 10 years of planning, engineering and permitting, I'm announcing that AGDC has reached an exclusive framework agreement with a qualified energy company to privately lead and fund the development of the Alaska LNG project,” he said.
Richards says AGDC won’t release the name of the company until a final agreement is reached. But he says the company has “extensive U.S. and international natural gas and LNG experience.”
“The terms of the framework agreement have been negotiated,” he said. “The next step is for both parties to create legally binding development agreements that will move the project forward.”
Tim Fitzpatrick, the corporation’s spokesperson, said Monday’s announcement came after roughly eight months of discussions between AGDC and the unnamed company. AGDC is now exclusively working with the developer until contracts are final.
It’s been roughly a month since the Alaska Industrial Development and Export Authority approved a $50 million line of credit to update the project’s engineering and design work. Richards said Monday that move was “critical” to the framework agreement, which officials hope to finish soon.
“The sooner that this project is underway, the sooner Alaskans benefit from our North Slope natural gas for the long term benefits,” he said.
Construction of the 800-mile pipeline has been floated for decades. But high costs and questionable demand have stymied progress.
The project got new life after Russia’s invasion of Ukraine sent some countries in Europe looking to diversify their energy sources. And Dunleavy has celebrated what he anticipates will be a more accommodating federal government once President-elect Donald Trump is sworn in later this month.
Fitpatrick said the agreement will cover the full project cost, but that the state will have the option to chip in up to 25% of costs once a final investment decision is made. He says it would be up to Dunleavy and state lawmakers to decide whether the state wants equity in the final project.
On Monday, Dunleavy said he thinks there’s a “real opportunity” for the project.
“I’ve questioned it for years, to be perfectly honest with you,” he said. “And as I mentioned earlier, I’ve been hesitant to talk about it until there’s some real concrete, I think, steps going forward. But I think we’re entering a phase of reality for this pipeline.”
Richards says he expects to announce a final agreement within the next few months. Then, he says, work could start on front-end engineering and design — the last step before any construction could start.
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