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Glenfarne announces another Alaska LNG purchase letter of intent
Alan Bailey for Petroleum News
Glenfarne Alaska LNG, the majority owner of the project for developing a liquefied natural gas pipeline from the North Slope to Southcentral Alaska, has announced the signing of a letter of intent for the offtake of 1 million tons per year of Alaska LNG by Tokyo Gas Co., Glenfarne announced on Oct. 24. A letter of intent expresses serious interest in a future firm business deal and, while being non-binding, can indicate key parameters such as anticipated pricing and offtake volumes.
"This agreement validates the strength of Alaska LNG's commercial offering and the importance of Alaska LNG as a strategically positioned supplier of affordable, clean LNG for U.S. Pacific allies," said Glenfarne Chief Executive Officer and Founder Brendan Duval. "Tokyo Gas pioneered the LNG industry with their agreement to purchase LNG from Alaska fifty-five years ago and is one of the most respected voices in the industry. We welcome their participation in Alaska LNG."
Duval was referring to the Japanese company's purchase of Cook Inlet LNG produced in the past, when Cook Inlet gas production was at its heights.
Duval recently said that 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.
Five agreements Glenfarne says that in the past seven months it has signed five letter of intent agreements with leading LNG buyers in Japan, Korea, Taiwan and Thailand, adding that these agreements now account for 11 million tons per year of the anticipated 16 million tons per year of LNG sales that would be required to reach a financial close for the project.
The company said that engineering company Worley is completing the final engineering and cost validation for the project.
The project involves the construction of an 807-mile, 42-inch diameter LNG pipeline from the North Slope to the Cook Inlet, to both meet Alaska's natural gas needs and to eventually deliver 20 million tons per year of LNG for export.
The development plan involves two phases. Phase one would consist of the construction of a 765-mile pipeline to the Anchorage region in support of Alaska gas supplies.
Phase two would add a Cook Inlet LNG export terminal for the sale of LNG to customers such as Tokyo Gas. An extension gasline under the Cook Inlet would connect the North Slope gasline to the export terminal.
The State of Alaska, through the Alaska Gasline Development Corporation, owns 25% of the Alaska LNG project through AGDC's subsidiary, 8 Star Alaska.
-ALAN BAILEY
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