Glenfarne on Alaska LNG
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Company Duval founder in Q&A with Gov Dunleavy on merits of Alaska LNG Project
Kristen Nelson Petroleum News
Brendan Duval, CEO and founder of Glenfarne, is determined to get the Alaska LNG Project done. That was his comment at the conclusion of a Q&A session he did with Alaska Gov. Mike Dunleavy in Anchorage June 5 at the Alaska Sustainable Energy Conference.
In March Glenfarne became 75% owner of Alaska Gasline Development Corp.- s 8 Star Alaska subsidiary, gaining the obligation to finance and build Alaska LNG.
The plan is to build the project in phases - starting with the pipeline between the North Slope and the west side of Cook Inlet, bringing natural gas to Southcentral. The liquefied natural gas facility at Nikiski and the Arctic Conditioning Plant on the North Slope would come later, along with extension of the pipeline under Cook Inlet and the addition of compression along the line.
Financing The initial pipeline phase is estimated to cost some $11 billion, subject to engineering and cost updates by Worley, selected by Glenfarne in late May to do additional engineering and prepare a final cost estimate for the pipeline portion of the project.
Each phase of the project will be financed separately, using project financing.
Project financing is the predominant form of financing for U.S. LNG projects, Duval said, one Glenfarne has used for its Gulf Coast LNG projects, Texas LNG and Magnolia LNG. In the past, oil and gas companies funded and built pipelines and LNG projects, as was the case with the trans-Alaska oil pipeline and the original LNG facility at Nikiski on the Kenai Peninsula.
Duval said capital is available for good LNG projects because good money is made on private project LNG in the U.S., with $200 billion in privately sponsored U.S. LNG projects in the last 10 years.
Cost overrun issue Dunleavy asked Duval about the concern about cost overruns.
Duval said you start by looking at the project from the ground up, with 40% of the budget in the LNG plant.
Glenfarne knows Gulf Coast liquefaction costs and while labor will be slightly higher in Alaska, LNG trains are more efficient.
For the pipeline, he said, you look at unit rates for constructing, which in Texas are $150,000 per inch mile; you add 60% for Alaska, bringing that to $250,000 because of extreme conditions; and then add 40% to that.
With pipelines, 15% of the cost is on materials, with the rest logistics, planning, man camps, construction etc., Duval said.
What drives up costs is when you- re not working - when crews are in place but are held up by problems.
He said the situation for the Alaska pipeline is unique. The engineering is done; the right of way is established - parallel to the trans-Alaska oil pipeline and then following the route of the Alaska Railroad; geotechnical drilling has been done.
And there are thousands of workers on the North Slope who know how to live and work in Alaska conditions.
Dunleavy added that North Slope gas is known; Native claims issues were settled in the 1970s; and the project has the support of most Alaskans.
Shipping is part of the price, Duval said, and for U.S. gas, Alaska LNG has a shipping advantage over the Gulf Coast: it doesn- t have to go through the Panama Canal or around Africa.
The feed gas cost will be less than the Henry Hub rate on the Gulf Coast because Alaska gas is stranded on the North Slope, giving it a 200% to 300% advantage, he said.
Compared to Gulf Coast LNG, Duval said, Alaska LNG looks 150% better before you get to the pipeline, and is still economic with the pipeline added in.
Project development discipline Getting funding requires scrutiny from financing agencies and partners - and the financing is what it is, Duval said: You can- t go back for more money, and 10 to 15 sets of eyes are looking at the numbers before you get to spend money.
At FID, final investment decision, you draw on your capital for the first time and issue notices to proceed to contractors.
The plan is to get to FID for the phase 1 pipeline by the end of this year, with financing, planning and final engineering over the next six months.
2026 will see detailed planning with orders for steel to mills and stockpiling of pipe by the end of the year.
Four spreads of construction are planned for 2027-28, with a second batch of pipe arriving in 2027, with pipeline completion by 2029.
2026 will see deep dive FEED on the LNG facility, with notice to proceed on that facility by the end of 2026 - work which is expected to take at least 4 years, with LNG testing in 2030 and first cargoes to Asia in 2031.
The Arctic Carbon Capture plant will have FID at the end of 2026.
Dunleavy asked if the project will get done.
Duval said megaprojects are difficult and there will be a lot of sleepless nights, but the fundamentals allow this project to get done.
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