The Alaska Gasline Development Corp. filed its application with the Federal Energy Regulatory Commission for the Alaska LNG project in April 2017 and has been asking FERC, the lead federal agency for the project’s environmental impact statement, to publish a schedule for EIS completion. AGDC had hoped to have the EIS in hand at the end of this year and begin project construction in 2019.
On March 8, AGDC President Keith Meyer told the AGDC board that while they’d originally hoped to have the final EIS by the end of 2018, it was now expected in the first half of 2019.
But FERC says it will take until the end of 2019 for a final EIS.
The schedule published by FERC March 12 in the Federal Register called for issuance of a draft EIS in March 2019, notice of availability of the final EIS on Dec. 9, 2019, with the 90-day deadline for federal authorizations for the project on March 8, 2020.
The FAST program
In October, AGDC told legislators that Alaska LNG had applied for participation in a program instituted under reauthorization of the federal highway bill, FAST-41, Fixing America’s Surface Transportation Act, which recognizes major projects and elevates them in the federal arena. AGDC applied Aug. 7, at the urging of the Trump administration, and was accepted Aug. 17. And a presidential executive order issued Aug. 15, establishing discipline and accountability in environmental review and permitting for infrastructure, provides for all environmental reviews and authorizations within two years.
A schedule for financial draws for the project, presented to the Legislature in late February, shows a final investment decision in 2019, construction beginning that year, and first gas from the project in 2024-25.
On schedule for in-service date
AGDC believes the timetable FERC has announced will allow it to stay on schedule.
“A draft EIS in March 2019 with availability of a final EIS in December 2019 will allow us to keep Alaska’s gas export project on track for a 2024/25 in-service date,” Meyer said in a statement March 12 after the FERC schedule was published.
“Achieving clarity on the permitting timeline is another critical step forward for the project,” he said, adding that “AGDC is appreciative to FERC and to the Administration for their continued commitment to keeping this project on the Fast Track.”
Meyer told the AGDC board March 8 that because of the project’s FAST designation, once FERC publishes a schedule there will be an “incredibly bright light” on that schedule and FERC will have to explain any delays to Congress.
Following AGDC’s application with FERC in April 2017 for a Natural Gas Act Section 3 permit for the Alaska LNG project, FERC sought additional information through a series of environmental data requests.
“Over the past 11 months, since first filing our application with FERC, Commission staff have diligently addressed all of the requirements of the National Environmental Policy Act (‘NEPA’) as they write the draft EIS,” AGDC Senior Vice President Frank Richards said in the March 12 statement.
Additional requests
Richards told the AGDC board March 8 that FERC had submitted three environmental data requests, some 801 questions, and that AGDC had provided those answers, the last of them in January.
On Feb. 15 AGDC received an additional 288 requests from FERC, with 279 agency comments. A significant amount of that information had already been supplied, he said, and said AGDC would consult with FERC on the location of that data. AGDC responded March 7 to the Feb. 15 requests, including 41 complete answers with a schedule for an additional 222, Richards said, adding that 91 percent of the responses will be complete by the end of April.
AGDC has also asked FERC for a better understanding on 21 questions which require field work and potentially engineering work. FERC has scheduled a technical conference for March 22, Richards said, noting that the public can listen in on that meeting.
Funding approval
AGDC is seeking approval from the Legislature to raise money from third parties - special designation program receipt authority, Meyer told the board. The immediate goal, he said, is to raise enough money to do some additional engineering work and complete regulatory applications, with a goal of having $500 million to $700 million available for efforts over the next 18 months. The more funding, he said, the more quickly the project can move forward.
On the subject of gas supply, Meyer said the producers have orally committed and it is now time to convert those commitments into contracts. He said confidential conversations with the producers are ongoing. Producers have had about 40 years to think about a gas supply agreement, he said, and while they have the rights to the gas they also have an obligation to market it and AGDC is helping with that.
The focus is on maximizing the value of North Slope natural gas and once infrastructure is developed that gas resource becomes reserves, a borrowing base on the producers’ books, Meyer said.
He characterized discussions with the producers as very good and cooperative.
The project is basically a pipeline, with an LNG plant on the end so the gas can be put on a boat, Meyer said. And there isn’t a single major gas pipeline in the U.S. owned by major producers - the business isn’t attractive to them and doesn’t fit them.
He said producers do pipelines elsewhere in the world only when they have to, and in Alaska they don’t have to.
The producers’ lack of interest has been mischaracterized, he said - the project isn’t economic for producers, but is economic for a pipeline.
Meyer told the board that AGDC is no longer seeking letters of intent or memoranda of understanding except for very select regional customers. Four are announced - Sinopec, Tokyo Gas, Kogas and PV Gas - and seven are confidential.
As for communications, Meyer said the message in the first half of 2017 was “give us a chance, let the new structure and strategy have time to work”; in the second half of the year that changed to “this is real”; and in 2018 AGDC is shifting to a “get ready,” “Alaska first” call to action.
