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AGDC moves ahead with marketing LNG
Kristen Nelson Petroleum News
The Alaska Gasline Development Corp. continues to move forward with permitting for the Alaska LNG project and with marketing Alaska’s gas, focusing on Asian markets. AGDC took over the Alaska LNG project at the end of last year after the North Slope producers declined to move the project forward at that time.
Alaska LNG has an advantage over projects proposed for Oregon and western Canada, AGDC President Keith
Meyer told the corporation’s board at an Aug. 10 meeting. The proposed Oregon LNG project, like Canada, has a big pipeline to build - those are big pipeline projects and nobody wants those pipelines, he said.
Alaska, on the other hand, is a pipeline project with an LNG facility - and this is a pipeline that everyone wants, Meyer said.
Dave Cruz of Anchorage, the board chairman, noted that AGDC was founded by the Legislature to bring gas
to Alaskans, because of a potential natural gas shortfall in Cook Inlet. That potential shortfall hasn’t been resolved, he said, and gas to Fairbanks hasn’t been resolved. And there is no plan for gas in the rest of Alaska.
Alaska LNG is essential for the state’s economy Cruz said, with a 90-year natural gas supply available based on known reserves - a supply that would change the state.
Marketing moves ahead Lieza Wilcox, AGDC’s vice president, commercial and marketing, reviewed marketing efforts for the project. AGDC has executed 17 confidentiality agreements with companies in six markets, she said, with six of those agreements executed since the June board meeting.
AGDC is conducting meetings to provide more detailed commercial and technical information, Wilcox said.
Proposed letters of intent have been transmitted to entities which have signed confidentiality agreements, she said. AGDC has a previously announced memorandum of understanding with Korea Gas Corp., signed in late June.
Wilcox said AGDC has one letter of intent executed by the counterparty and under review, and drafts in active review by 13 parties in several countries.
Five of the executed confidentiality agreements are with entities in China, with review of the letters of intent underway and a third set of in-country meetings planned to discuss the letter of intent drafts.
There have been two additional trips to Japan since the June board meeting, she said, and commercial activity has narrowed to the most interested companies - five to date.
LNG hubs may develop in Southeast Asia, she said, with LNG receiving terminals to which Alaska could be a supplier.
Capacity solicitation Wilcox said capital solicitation for AKLNG started June 15 and responses are due Aug. 31, with prospective foundation customers receiving rights and prices to reserve capacity on the system.
North Slope producers and other qualified third parties have been invited to participate, she said.
The capacity solicitation will determine the initial size of the project.
AGDC also continues to market directly to LNG buyers and will reserve transferrable capacity on the system.
Wilcox said the corporation will enter into negotiations for tolling agreements with those responding to the capacity solicitation.
AKLNG would have separate tolling agreements for the gas treatment plant on the North Slope, the pipeline and the liquefaction facility.
Options include those owning gas holding tolling capacity on all three facilities; wellhead gas purchasers holding capacity on all three facilities; and an in-state aggregator holding tolling capacity on the gas treatment plant and the pipeline - and providing natural gas for instate users.
Both the gas owners and those buying gas at the wellhead would provide LNG to markets.
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