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

Vol. 23, No.9 Week of March 04, 2018

AGDC provides permit timelines, answers other questions from Senate

Kristen Nelson

Petroleum News

The Alaska Gasline Development Corp. has provided answers to questions from Sens. Cathy Giessel and Anna MacKinnon, both Anchorage Republicans, poised following a January update to the Senate Finance and Resources committees. Giessel chairs Senate Resources; MacKinnon co-chairs Senate Finance.

Among numerous questions was the expected timeline to acquire various major federal permits and approvals.

AGDC said in its Feb. 22 response that it has submitted five applications for special permits to PHMSA, the federal Pipeline and Hazardous Materials Safety Administration, and expects to receive the permits in the first quarter of 2019.

It expects to receive an Army Corps of Engineers wetlands 404 permit for the Alaska Stand Alone Pipeline Project, ASAP, by this August, following a preliminary determination on wetlands in March and distribution of the ASAP final supplemental environmental impact statement this April.

For the Alaska LNG Project, the 404 permit would be issued at the conclusion of the Federal Energy Regulatory Commission-led National Environmental Policy Act process. AGDC said it requested a schedule from FERC completing the NEPA process by the end of the year. While FERC has not responded to its request for a schedule, AGDC said if FERC is able to meet the requested schedule a Section 404 permit would be expected in the second quarter of 2019.

AGDC responded to existing FERC requests for additional data by January, but in February FERC made more data requests and said it was not able to move ahead until it had all the information it needed.

The U.S. Department of Energy issued export licenses in 2014 and 2015, but those were to the Alaska LNG Project LLC. AGDC said it is negotiating with the LLC for land rights for the proposed LNG plant at Nikiski and for the transfer of the export licenses. The license transfer will require federal approval, AGDC said, or it could apply for new export authorization.

Significantly fewer legislative approvals will be required under the new structure, but if the state elects to take its gas as royalty in kind then a gas sale agreement between the Department of Natural Resources and AGDC would require legislative approval, as would an agreement DNR is working on with the producers on field cost allowances.

AGDC also addressed mitigation costs for the Section 404 wetlands permit. It said it is actively engaged in discussions with the Corps for ASAP project costs and those discussions will pave the way for Alaska LNG. The costs for ASAP wetlands mitigation will be know by the time the Corps approves the ASAP draft compensatory mitigation plan, which will happen concurrently with issuance of the ASAP Section 404 permit, AGDC said. “Comments from the Corps have indicated there may be regions along the route where mitigation will not be required,” AGDC said. The Corps will calculate the final mitigation required for ASAP following its approval of the draft plan, anticipated to be completed this August.

“Mitigation costs for the Alaska LNG Project will be larger than costs for ASAP primarily due to Alaska LNG’s wetlands acreage being larger,” AGDC said, and could be some $20,000 per acre if it is required to use existing third-party mitigation programs. In areas where no third-party mitigation programs are available, it would be required to “mitigate through permittee-responsible mitigation that may include restoration of portions of impaired watersheds, which may be considerably more expensive,” AGDC said.


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