The developers of the proposed Donlin Gold mine in Southwest Alaska are planning to decide next year whether the project’s finances pencil out.
That timeline could depend in part on state utility regulators: At the moment, Alaska doesn’t have rules for the kind of gas pipeline needed to power the mine.
Developers are proposing a contract-carrier gas line, a change from the usual practice in Alaska. Here, pipelines — including the trans-Alaska oil pipeline — have tended to be common carriers, with shippers able to buy capacity as needed.
A contract carrier sells long-term deals for reserved capacity in a pipeline, regardless of whether or not that space is used.
Though lawmakers have approved rules to govern contract carrier gas pipelines, which would reserve space for long-term use, the state’s regulators haven’t adopted those regulations yet.
“This is the ask,” said Donlin Gold permitting manager Enric Fernandez in a Tuesday meeting of the Regulatory Commission of Alaska.
“We’re asking the RCA to please proceed with adopting these regulations,” he said.
Donlin’s plans include a natural gas pipeline stretching 316 miles from Anchorage’s Beluga power plant on Cook Inlet to the mine site near the Kuskokwim River.
Based on a 2002 feasibility study that was updated in 2020, “we’re looking about $1.8 (billion) or $2 billion” for the cost of the pipeline, Fernandez said, but that figure is being updated as part of a “bankable feasibility study” that would compile financial information for potential investors.
That study is expected to be done in 2027.
If the study pans out, construction could begin later that year and finish by 2031.
But in order for that cost study to be complete, Donlin Gold first needs to know what the state’s rules are for contract-carrier gas pipelines.
In 2013, the Alaska Legislature and then-Gov. Sean Parnell approved a law allowing contract-carrier gas pipelines.
That law was to be implemented by the RCA, but new regulations were never adopted.
Fernandez said that, as currently planned, the pipeline will be larger than what’s needed for the mine alone, and that gas could be sold to local communities as well.
“It could transfer natural gas for others’ needs,” Fernandez said.
Donlin’s developers signed a letter of intent last week with Glenfarne, the lead developer of the proposed trans-Alaska natural gas pipeline, but Fernandez said that Donlin is open to sourcing gas from other sources, including imports.
“There’s a number of options that are being proposed for Southcentral Alaska right now to bring natural gas … and we just see ourselves as part of the solution,” Fernandez said. “If there is a need to import natural gas, we can be part of that order, hopefully resulting in a larger order. That means maybe better economics there.”