The Alaska Gasline Development Corp. began capacity solicitation for the Alaska LNG project June 15. AGDC President Keith Meyer told the organization’s board that day that the capacity solicitation would help determine potential phasing of capacity or segments. The solicitation will run from June 15 through Aug. 31, he said, with a focus on North Slope producers and Asian consumers and a goal of identifying who wants capacity in the first phase of the project and how much capacity.
AGDC, an independent public corporation of the state of Alaska, took over leadership of the AKLNG project at the end of 2016 after the project’s industry partners - BP, ConocoPhillips and ExxonMobil - decided to pause work while the state wanted to continue on.
Meyer said nonbinding letters of intent would be sought from foundation customers who participate in the capacity solicitation with definitive agreements to be negotiated by May 2018.
In a press release AGDC said the solicitation would “determine the foundation customers who wish to reserve capacity on the Alaska LNG system segments.” Segments of the proposed system include the gas treatment plant on the North Slope, the pipeline from Point Thomson to Prudhoe, the pipeline from Prudhoe to Cook Inlet and the liquefaction plant at Nikiski.
A description of the capacity solicitation from AGDC says it will offer “prospective foundation customers certain rights and prices to reserve capacity on the Alaska LNG system.”
Not widely advertised
Meyer told the board it probably wouldn’t be a widely advertised open season but would focus on Alaska producers and Asian consumers.
AGDC said those invited include the major North Slope oil producers owning leases with known natural gas reserves.
“AGDC’s capacity solicitation provides North Slope producers the opportunity to monetize the natural gas resources currently stranded on the North Slope,” Meyer said in the press release.
Others in the solicitation include “qualified third parties, including LNG buyers and traders,” AGDC said, “including global LNG customers who seek to secure their own North Slope natural gas supply and toll on Alaska LNG.”
Under a tolling model the infrastructure is not owned by the producing companies, as is the case with the trans-Alaska oil pipeline, but is owned separately with shippers paying a toll to ship on the line and use the project’s other facilities such as the liquefaction facility proposed for Nikiski.
The corporation said it would continue to market directly to Asian LNG buyers throughout the capacity solicitation process, and would “reserve transferrable capacity on the Alaska LNG system to accommodate those volumes for customers that prefer to purchase LNG at the jetty rather than become a capacity holder.”
