The Alaska LNG Project took a step forward Thursday. That’s when the board of the state-run Alaska Gasline Development Corp. authorized an agreement with Houston- and New York-based pipeline developer Glenfarne Group to shepherd the project to a final investment decision.
“We've been burning the midnight oil to move forward and work on these definitive agreements with Glenfarne,” said AGDC President Frank Richards.
He called into Thursday’s special board meeting from Tokyo – the latest stop on his East Asian tour he’s on with Gov. Mike Dunleavy to promote the project.
Under the agreement, Glenfarne will own three-quarters of the $44 billion project. The state of Alaska will own the other quarter. That’s the same equity share the state had when the project was being led by ExxonMobil, BP and ConocoPhillips. A corporation spokesperson said AGDC is staying a part-owner to uphold its statutory obligations.
If it’s built, the Alaska LNG Project would move natural gas between the North Slope and Southcentral. The full project includes a gas treatment plant on the Slope, an 800-mile pipeline and a liquefaction and export facility in Nikiski.
As the new owner, Glenfarne’s first task will be to update the project’s existing cost estimate to 2025 dollars. AGDC estimates that work will cost around $150 million. A small piece – $4 million – is covered by an existing federal grant secured by U.S. Sen. Lisa Murkowski in 2023.
If the project ultimately doesn’t move forward, Glenfarne will be able to recoup as much as $50 million from a backstop OK’d by Alaska’s state-run development agency, the Alaska Industrial Development and Export Authority.
The agreement also says Glenfarne will prioritize the pipeline piece of the project before moving to later phases. That would let Alaska customers access gas before it’s available for export.
The Arctic treatment plant would likely be necessary to allow gas to start flowing from established fields like Prudhoe Bay and Point Thompson. But state officials say they’re optimistic gas from a forthcoming field developed by Great Bear Pantheon won’t require treatment before it’s sent south. The developer signed an agreement with the state last year, but the field has not yet started production.
“This really is a tremendous opportunity for the state, for the United States, for our allies, and we couldn't be more thrilled to see the board vote in favor of this transaction,” Glenfarne CEO Brendan Duval told the AGDC board.
On a Thursday evening call with reporters, Dunleavy said Alaska is closer than ever to getting the pipeline project off the ground. But he says he understands if people still have doubts about its prospects.
“I was very skeptical for years on this project, and I'm not going to have a final celebration,” he said. “I'll get excited when these guys go to (final investment decision). I'll get excited when pipe is ordered. I'll get excited when it's welded. I'll get excited when gas is going through it. I'll really get excited when we flick on the switch and we're guaranteed that Alaska gas. So I would just say, stay tuned.”
While in Asia, Richards and Dunleavy picked up a nonbinding letter of support for the project from Taiwan’s state-owned CPC Corporation. And though the letter is nonbinding, Richards says it’s a big step towards making the project a reality.
“Six million tons represents one train of the Alaska LNG,” he said. “So it's significant for us, and that has then drawn significant interest in review by the other countries that we're talking to.”
Richards said he and Dunleavy had also met with officials and energy companies in South Korea, Japan and Thailand.
But some have questioned the extent to which foreign interest is the result of tariff threats from the White House. Dunleavy says there are concerns about international trade. But he says there’s also demand for natural gas.
“Asian countries are needing gas,” he said. “The question is, where are they're going to get it from? And Alaska, in many cases, is closer to them, and we believe it could be delivered at a price that works better than other locales.”
Though Thursday’s decision is a step forward, it’s still unclear whether enough investors will sign on for the project to be built.
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