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Governor talks Pt Thomson to Fairbanks natural gas pipeline
Kristen Nelson Petroleum News
The state’s plan to commercialize and export North Slope natural gas as LNG, allowing economic movement of gas off the Slope for use in-state, appears to be headed to phased implementation.
This was signaled by Alaska Gov. Mike Dunleavy in his Jan. 28 state-of-the-state address and in an opinion piece in early February, when he discussed a line not to tidewater - where the plan has been to liquefy the gas and export LNG - but to the state’s road system.
In his state-of-the-state the governor said: “A completed gas line from the North Slope to our road system creates endless possibilities, such as cheap, reliable, and clean energy for our residents, for our military bases, and for potential manufacturing and new industries.”
He said, “we’ve never been closer to realizing a privately led gas line project from the North Slope than we are right now,” and cited work completed by the Alaska Gasline Development Corp., including permits, research “and private investment nearing reality.”
In his opinion piece Dunleavy was more specific. He talked about the objective to getting North Slope gas to market and said “we are closer than ever to bringing this concept to fruition with a gas line between Point Thomson and Fairbanks.”
He pegged the cost of a Point Thomson to Fairbanks line - after the cost reductions achieved - at $5.9 billion and said that in addition to private funding “there is a strong possibility of federal funding.”
On the agenda In an agenda and board packet posted prior to a Feb. 4 AGDC board meeting (scheduled for after this issue of Petroleum News went to press) there is discussion of phasing the Alaska LNG Project, “starting with a $5.9 billion U.S. clean energy infrastructure initiative that will resolve longstanding climate, pollution, and energy problems affecting vulnerable rural populations and strategically located Department of Defense installations.”
There is a resolution which the board would need to approve which says, in part, that AGDC has identified a strategic party “fit, willing, and able to initiate and lead Phase 1 of Alaska LNG, inclusive of natural gas pipeline development, ownership and operation from Pt. Thomson to Prudhoe Bay to Fairbanks, Alaska.”
Identifying a private party to take over the project is part of the strategic plan the board adopted in April 2020, with a goal of transitioning from state to private ownership by June 30, 2021.
Dunleavy mentioned the possibility of federal funding for a line to Fairbanks, and the AGDC board packet includes discussion of Biden administration objectives and says AGDC has contracted with Brownstein Hyatt Faber Schreck and Holland & Hart for strategic counsel and assistance with communications with congressional committee leadership, president-elect transition teams and support organizations.
Point Thomson to Fairbanks A map in the board packet shows a Point Thomson to Fairbanks line, with objectives of “in-state gas supply” and “Phase 1 to full LNG Export.”
The phase 1 portion of the project is described as:
*Point Thomson gas supply with minimal conditioning.
*A 32-inch Point Thomson transportation line.
*A flange connection at the Gas Treatment Plant Pad.
*A 42-inch mainline.
*$5.9 billion.
Objectives are listed as
*An in-state gas supply.
*Phase 1 to full LNG export.
*De-risking Alaska LNG.
*Moving Alaska LNG into private sector sponsorship.
Near-term benefits Near-term economic benefits for Alaska are listed as:
*Propelling near-term economic recovery for Alaska, with a $1.5 billion impact over 24 months, 1,400+ high-paying direct jobs and 20,000+ indirect jobs.
*Immediate benefits to hardest-hit service industries.
*Delivering natural gas to Interior Alaska in 2025.
*And built, owned and operated by the private sector.
Initial cost of natural gas delivered to Fairbanks would be $15 per million British thermal unit, with gas prices dropping to $5 per million Btu in Interior and Southcentral once there is an LNG export project.
- KRISTEN NELSON
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