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Glenfarne and Donlin Gold propose
gas pipeline from Southcentral
Alan Bailey for Petroleum News
On Jan. 7 Glenfarne Alaska LNG LLC and Donlin Gold LLC announced the signing of a non-binding letter of intent for the construction of a 315-mile natural gas pipeline from Southcentral Alaska to the planned Donlin gold mine, 10 miles north of the village of Crooked Creek on the Kuskokwim River. The pipeline would obtain gas via the gas pipeline that Glenfarne is planning to build from the North Slope to Southcentral.
Donlin Gold has previously considered the possibility of constructing a pipeline to ship Cook Inlet produced gas to the gold mine. Natural gas would be used for power generation at the mine.
The planned gold mine is owned by Novagold Resources Inc. and Paulson Advisors LLC. The two companies own Donlin Gold, the company that operates as the mine developer.
Combined planning Glenfarne says that the companies will work to formalize an agreement for the potential sale of up to 50 million cubic feet per day of natural gas for transmission through the pipeline. The companies also commit to cooperating on determining the most cost effective method to develop and construct the pipeline, and to construct a power plant for the mine.
If developed, the Donlin mine could become the largest gold mine in the United States. Alaska Native corporations Calista Corporation and The Kuskokwim Corp. own the mineral and surface land rights in the area of the planned mine.
The Alaska gas pipeline project Glenfarne plans a two phase project for the export of natural gas from the North Slope. Phase one involves the construction of a 765-mile, 42-inch diameter gas pipeline from the Slope to Southcentral Alaska. Phase two adds an LNG terminal and related infrastructure for the export of liquefied natural gas from Alaska. The project is 75% owned by Glenfarne and 25% owned by the Alaska Gasline Development Corp. The pipeline to Donlin would presumably depend on the completion of phase one of the project.
Company support "Alaska LNG offers abundant low-cost natural gas that will enhance the economics and facilitate development of energy-intensive mining projects in Alaska," said Adam Prestidge, president of Glenfarne Alaska LNG. "Adding a foundational customer like Donlin Gold, one of the largest known undeveloped gold deposits in the world, to Alaska LNG provides significant volume discount benefits that will result in lower energy costs for Alaska consumers."
"As Donlin moves into what we hope to be the largest single gold mine in the United States, natural gas from Alaska LNG could offer significant benefits not only for the mine, but for the entire southwestern Alaska region," said Greg Lang, president and CEO of Novagold. "We look forward to working with Glenfarne to unlock the value of both of these world-class Alaskan resources: Donlin gold and Alaska LNG."
--Alan Bailey
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