NEWS BULLETIN

January 07, 2015 --- Vol. 21, No. 1January 2015

AIDEA cancels North Slope LNG concession agreement

On Jan. 5 the Alaska Industrial Development and Export Authority formally cancelled the concession agreement with engineering firm MWH for the construction and operation of a North Slope liquefied natural gas facility for the supply of gas to Fairbanks and the Alaska Interior, AIDEA spokesman Karsten Rodvik told Petroleum News in a Jan. 5 email. The concession agreement had been scheduled to terminate at the end of December, but with the possibility of a 90-day extension. Apparently MWH had requested a possible extension of the deadline but has now withdrawn that request.

"MWH had previously withdrawn its request for a 90-day extension of the concession agreement," Rodvik said. "Monday's action was the formal termination necessary for AIDEA to move forward with investigating alternatives for bringing natural gas to Interior Alaska."

Under the terms of the concession agreement, MWH had been trying to achieve financial close by Dec. 30 for the plan to construct the North Slope plant. However, during an AIDEA board meeting on Dec. 16 it became clear that some of the project deliverables required for that close were not complete. Participants in that meeting also expressed concerns about the projected cost of liquefied natural gas in Fairbanks, based on estimated costs for the various components of the supply chain for delivering the LNG from the North Slope.

"AIDEA is fully committed to the goal of bringing affordable energy to the Interior, and we appreciate the effort that MWH put into helping bring the North Slope LNG plant closer to reality," Rodvik said. "MWH achieved a great deal during 2014, and we thank the entire MWH team for all of their hard work."

- Alan Bailey

See story in Jan. 11 issue, available online Friday, Jan. 9 at www.PetroleumNews.com


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