At Gastech’s Suppliers Panel session, which was dedicated to what the impact of lower commodity prices will be on the LNG market over the next five years, perhaps the most compelling story involved the proposed Alaska LNG project. Audie Setters, the Alaska Gas Team General Manager, provided Gastech delegates with a progress update of the state’s signature gas project.
“The most important thing to know is that the project has a great partnership between Alaska’s three biggest producers—BP, ExxonMobil and ConocoPhillips—and a state government that badly wants this project to move forward,” Setters said. “We continue to progress toward a final investment decision in 2019. If that happens, then we would have first output and transmission in 2025. We have already received preliminary Department of Energy (DOE) approval for the project to export LNG, and we don’t expect any particular problems in getting environmental permits approved.”
As outlined by Setters, the “foundation fields” for the project, known as AKLNG, are all on the North Slope. The primary fields will be Prudhoe Bay, which has a 27-Tcf gas cap, and Point Thomson. About 75% of the gas will come from Prudhoe Bay, while 25% will be supplied from Point Thomson. In addition, an 800-mi gas export pipeline will be constructed and will roughly follow the footprint of the oil line – the Trans-Alaska Pipeline System, down to Nikiski, Alaska. There, a three-train, 3-Bcfd, 18.5-MMty gas liquefaction plant will be built.
“Another advantage we have,” Setters continued, “is that all the wells and infrastructure are already in place. So, it’s much more like a brownfield project.” At a proposed $45 B to $65 B, AKLNG will be the largest, single investment in Alaskan history. The project potentially will create between 9,000 and 15,000 jobs during the design and construction phases; plus approximately 1,000 jobs for continued operations. In addition to generating billions of dollars for the Alaskan state treasury, the project will provide access to natural gas for Alaskan citizens.
In a project update presented to Alaskan state legislators in September 2015, AKLNG said that spending on pre-FEED activities through July 2015 totalled $243 MM. The initial design scope was 75% complete, and 2015 field work was roughly 50% complete. The project partners have also been actively acquiring land, with about 600 acres purchased in Nikiski for the actual LNG plant site. During 3Q 2015, project coordinators were developing a 2016 work program and budget.
What do Asian buyers expect from Alaska? And, how can Alaska meet their requirements? Let us know your thoughts below.
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Image Source: Image provided by Alaska LNG project sponsors
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