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Walker: Monetizing gas the goal; will continue even without AKLNG
The first audience question Alaska Gov. Bill Walker got at the end of a presentation he made Sept. 7 to the Resource Development Council was on the future of the Alaska LNG project and how that future would be funded.
The governor, elected on an independent platform, had based his run on moving an Alaska LNG project forward, and once elected, he took over a project begun under the administration of his predecessor, Gov. Sean Parnell, a Republican, and backed by what was then a Republican majority in both houses of the Alaska Legislature.
That project was a partnership between the three major North Slope producers and the state to build a gas treatment plant on the North Slope, an 800-mile pipeline to Nikiski on Cook Inlet and a liquefaction facility at Nikiski to turn North Slope natural gas into liquefied natural gas for shipment abroad. The pipeline was also to provide access to North Slope natural gas for communities along the line, particularly Interior Alaska.
After the producers declined to move to the next step of a phased project, the state took over leadership.
Strong commitments needed Walker said there was interest in the project, and pointed out that state money for the Alaska LNG project was there when he came into office. He said he’d just played the hand that was there.
That existing money, he said, allows the state - now that it is heading up the project - to meet directly with the market. The market response, he said, has been very, very positive.
But it would take really strong commitments for the project to go forward, Walker said.
He said he believes the project should continue with the state funding it has and mentioned interest in the project from the Trump Administration - and visits to Alaska by the largest LNG buyers in the world. Those buyers, Walker said, evidently see the advantage of seven to 10 days of travel time between Alaska and Asian markets.
But the governor said he doesn’t allow himself to be too optimistic.
He said he is hopeful about the project, but doubtful it can continue beyond existing funding.
The Legislature left the existing money in place, Walker said, but said he thought the administration would be hard pressed to ask for more money.
Monetizing gas He said he always wanted Alaska to be its own salesman and use the benefits of a sovereign to bring down the cost of the project: And that has happened, he said, but if there is no market engagement on the project, there is no engagement.
That doesn’t mean, however, that the state stops looking for ways to monetize the gas, Walker said. For example, Alaska has all of the ingredients for a fiber optic manufacturing business and alternatively it might possible to take gas off the North Slope on a seasonal basis, he said.
Walker said one reason he hopes a gas pipeline project works is because of benefits to the state’s mining industry. The largest beneficiary of Australian natural gas development is the mining industry, he said.
And on a national basis, AKLNG is the only project that would have as much balance of trade impact.
The Alaska LNG project is the largest get-well card the state has and if a customer would step up and take a long-term contract there will be a project - if not, there won’t be, Walker said.
- KRISTEN NELSON
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