Alaska passes bill to advance state’s LNG project

Alaska’s state legislature has passed Senate Bill 138, which would advance a large-diameter, 800-mile natural gas pipeline project to transport production from the Alaska North Slope (ANS) to a 15-18 million tonne/year LNG plant on the state’s south-central coast.

The project will now move into the pre-frontend engineering and design phase to further refine the cost and engineering aspects. The bill affirms the commercial agreement signed by the state, Alaska Gasline Development Corp. (AGDC), the producers, and TransCanada Corp. to advance the Alaska LNG project (OGJ, Jan. 27, 2014, p. 25).

Passage of SB 138 also expands the role and mission of AGDC, enabling it to carry the state’s equity interest in the project’s infrastructure, particularly the liquefaction and marine facilities. AGDC said it also will continue to aggressively pursue the advancement of the Alaska Stand Alone Pipeline (ASAP) project parallel to the Alaska LNG project.

“SB 138 is a huge validation of the legislature’s decision to create an Alaskan-owned pipeline development company,” said AGDC Pres. Dan Fauske. “AGDC will now lead the state’s participation in this exciting LNG export project, while continuing to advance ASAP, the smaller in-state alternative.”

Alaska Gov. Sean Parnell (R) previously described the move toward a larger-diameter pipe as “a simple answer to a complex question about how to lower the cost of getting Alaska’s gas to Alaskans: Get more gas in the pipe (OGJ, Jan. 28, 2013, p. 14).”

The larger diameter will allow enough gas to be shipped to both meet the state’s needs and still have material for export, while creating the economies of scale necessary to maximize project efficiency and reduce costs.

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