Providing coverage of Alaska and northern Canada's oil and gas industry
January 2018

Vol. 23, No. 4 Week of January 28, 2018

AGDC answers Mat-Su Port McKenzie appeal

Kristen Nelson

Petroleum News

The Matanuska-Susitna Borough appealed to the Federal Energy Regulatory Commission in late December to be allowed to intervene in the agency’s Alaska LNG project determination, telling FERC that the Alaska Gasline Development Corp. should have included Port MacKenzie in the screening analysis for alternate sites for the AKLNG liquefaction facility. The project selected Nikiski as the lead site for the LNG facility in 2013. The borough told FERC that AGDC improperly evaluated Point MacKenzie, some 3 miles north of Port MacKenzie, rather than Port MacKenzie (see story in Jan. 21 issue of Petroleum News).

In a Jan. 23 response, attorney Howard L. Nelson of Greenberg Traurig LLP, writing for AGDC, said the corporation did not object to the borough’s motion to intervene out-of-time in the proceedings, but said that late intervention should not delay either FERC staff’s issuance of a schedule for environmental review or an order on AGDC’s application.

As to the borough’s characterization of the evaluation former project lead ExxonMobil and AGDC have done on a site for the LNG facility, he said that while the site selection was made prior to AGDC becoming the prior owner of AKLNG, “AGDC does, however, have an understanding of the screening process used by the former project manager, ExxonMobil, to identify and evaluate alternate sites.”

Port evaluation

Nelson told FERC the former joint owners of AKLNG initiated pre-filing in September 2014, and said the borough “was well aware of the project and the preferred site for the liquefaction at Nikiski.” The director of Port MacKenzie participated in open houses and scoping meetings “and supported the siting of the liquefaction facility at Nikiski,” he said. “There are no inaccuracies in the site selection process used by the project to evaluate the alternatives.”

The evaluation of Point MacKenzie, rather than Port MacKenzie, was not, as the borough asserted, a mistake, Nelson said.

The site analysis was performed in 2012 and the Master Plan for Port MacKenzie “indicated a number of planned uses at the Port other than LNG facilities that made the Port incompatible as a site for the Alaska LNG facilities,” he said. Uses cited by the master plan included significant increases in local and national businesses expressing interest in business operations at the port “and a dramatic increase in bulk commodity exports upon completion of a rail extension linking Port MacKenzie to the Railbelt.” The master plan also cited a need for a second trestle and expansion of the deep-draft dock to accommodate two vessels.

“Given the plan for these other operations at the port, Port MacKenzie was not included in the site-selection screening analysis,” Nelson said. A minimum of 800 to 1,200 acres are required for the LNG facility and safety zones.

“It is not possible to integrate a world class 20 mpta LNG plant and marine terminal within an existing port complex without constraining either existing or planned uses of the complex or the proposed LNG facility and its marine terminal,” he said. Based on a review of the port’s current master plan, “if the Alaska LNG plant and marine terminal were placed on this site, the entire southern half of the site would need to be dedicated to these facilities, which would require the relocation of existing facilities to the north.,”

Point MacKenzie

Since the project determined that Port MacKenzie was not a feasible site, a separate site 3 miles to the north was identified as a potential site and evaluated as part of the site-selection screening analysis. The Point MacKenzie site did not have conflicting planned uses, Nelson said, but was eliminated because it was on Native village lands, there was conflict with vessels using Port MacKenzie and the Port of Anchorage, the Point MacKenzie site had high bluffs and erosion rates, shallow water would require extensive dredging, there would be impacts on Beluga whales within a restricted critical habitat area and heavy ice concentrations combined with strong currents and rock outcroppings.

AGDC’s response also included notes and transcripts of meetings at which the port director acknowledged Nikiski as the LNG facility site and focused on alternatives for the pipeline route, with a preference for a route on the east side of the Susitna River, allowing the port to tap into the line.

Nelson said AGDC does not oppose the borough’s intervention in the case, “but would oppose any effort to require AGDC to perform additional site analyses at this stage of the proceeding. The Borough’s allegations of inaccuracies, mistakes and misrepresentations, as well as its claims of NEPA and CWA violations, should be rejected and disregarded.”


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