There had been numerous earlier agreements reached to build an Alaska natural gas pipeline. The former commercial agreement signed July 2 by Alaska Gasline Development Corp. (ANGC), BP PLC, ExxonMobil Corp., ConocoPhillips Co., and TransCanada Corp. was different.
It basically moved the Alaska LNG project into the pre-frontend engineering and design (pre-FEED) phase—a stage no previous Alaska gas project has ever reached.
Alaska Gov. Sean Parnell (R) welcomed the news. "Environmental and pipeline engineering fieldwork has officially begun," he said. "This milestone marks the historic progress we have made on a [gas pipeline]. Our way forward will continue to be on Alaska's terms and in Alaskans' interests."
During the pre-FEED phase, the three Alaska North Slope producers will spend hundreds of millions of dollars on the project's design and engineering, Parnell said. In coming weeks, the project's sponsors will begin to work on securing a US Department of Energy determination that the project is in the national interest, and continue work to obtain permits from the US Federal Energy Regulatory Commission.
Each producer, in addition to the state, will start lining up customers for the LNG that would be exported, Parnell said.
ANGC and the producers estimate the project will cost $45-65 billion in 2012 dollars, according to the Alaska Natural Gas Transportation Projects federal coordinator's office.
It said plans call for a massive plant at Prudhoe Bay to cleanse produced carbon dioxide and other impurities from the produced gas; an 800-mile pipeline from ANS to the liquefaction plant; and an LNG plant, storage, and shipping terminal at Nikiski, 60 air miles southwest of Anchorage along Cook Inlet.
Potential capacity
The 42-in. pipeline would carry 3-3.5 bcfd of gas. Alaskans would use some of it, and operating the pipeline and LNG plant would consume more. The plant would have the capacity to produce 17-18 million tonnes/year of LNG, processing 2.2-2.4 bcfd of gas, the ANGTP federal coordinator's office said.
The project's pre-FEED phase is expected to finish in late 2015 or in 2016, it added.
Sponsors scheduled public meetings for July 15 in Anchorage and July 17 in Fairbanks to provide a project overview and share information about current studies.
It's been 46 years since the landmark crude oil discovery at Prudhoe Bay also revealed there was an estimated 26 tcf of gas there—more than the US consumes in a year, the ANGTP federal coordinator's office noted. A late-1970s proposal for a pipeline to Fairbanks, then along the Alaska Highway to markets in the Lower 48 states, was considered because exporting US gas was anathema.
That clearly isn't the case now.
