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AGDC’s Meyer: 2018 a year of paperwork
Marketing 2017 focus; this year focus on regulatory requirements, getting to commercial agreements with JDA partners, producers Kristen Nelson Petroleum News
Alaska Gasline Development Corp. President Keith Meyer reviewed the corporation’s activities over the last year and answered questions at an April 12 press conference following a corporation board meeting.
Last year was a year of marketing and AGDC came out of 2017 with great dance partners for the project, Meyer said, a full slate of very good counter parties. He said he wouldn’t trade a single one.
2018 will be a year of paperwork with regulatory filings and commercial agreements, he said; then in 2019 the focus will be on preparation for construction.
Parallel paths Meyer said the project was moving on four parallel paths: regulatory, commercial, financial and technical.
On the regulatory side, the Federal Energy Regulatory Commission is the lead agency and issued its schedule for the project’s environmental impact statement in March, with a draft EIS scheduled for March 2019, a final EIS in December of that year and a final order in March 2020.
On the commercial and technical side, in late March AGDC hosted a group of 38 representing the three joint development agreement partners (China Petrochemical Corp., CIC Capital Corp. and Bank of China) with whom AGDC and the state of Alaska signed an agreement last year. The group split into teams - executive, commercial, facilities, pipeline and shipping - and were given tours of facilities on the North Slope and in Nikiski.
Meyer said this was not the first visit the JDA partners have made to Alaska, and said they also have access to an extensive data room which AGDC maintains. The partners have done a lot of due diligence, he said, and AGDC is getting them comfortable with the ability of Alaska companies to do this work. The project is also a little different because it is state sponsored, he said, and AGDC is also getting the JDA partners comfortable with that.
As for the role those partners might play in construction, Meyer said Sinopec has a very capable construction company and has built longer pipelines than this project, in higher places and with larger plants. But they lack cold weather experience, he said, so they met with local contractors with cold-weather experience.
He said the ability of Alaska companies is something AGDC is promoting.
The tour Meyer said the pipeline group drove the route from Prudhoe Bay to Coldfoot. The facilities group toured the Andeavor (formerly ConocoPhillips) liquefied natural gas facility in Nikiski, and the group also had a chance to try out the marine simulator at the Alaska Vocational Technical Center in Seward.
The executive group met with state departments, Alaska Native regional corporations, industry representatives and state and local elected officials in Anchorage. The emphasis is Alaska first, Meyer said, that companies in Alaska are capable and have done this work.
AGDC has a group that has gone back to China with the JDA partners, he said.
At its March meeting the board authorized Meyer to formally engage investment banks for the project, and AGDC engaged Bank of China Ltd., one of AGDC’s JDA partners, and Goldman Sachs & Co. LLC to serve as global capital coordinators to the project.
The signing of those agreements was announced in late March.
FERC, producers Frank Richards, AGDC senior vice president, engineering and program management, said the environmental data requests AGDC received totaled 1,370, with responses provided to some 1,100, almost 80 percent this year. By September, there will be responses to 100 percent of those data requests, he said, noting that some requests simply requiring information on where in the volumes already submitted the information can be found.
There was a meeting with FERC on the most recent requests, Richards said, and FERC didn’t require major field work on many of those requests, just tabletop analysis. There will be some field work required this summer on cultural resources, which will be reported to FERC by September.
On the LNG plant location, Meyer said some 100,000 pages have been filed around Nikiski, the designated LNG plant location. Richards said FERC has asked for an alternative analysis for Port MacKenzie and said AGDC would provide that analysis.
On the natural gas needed for the project, Meyer said AGDC is in the middle of discussions with the North Slope producers on the gas resource. He said the producers have been supportive.
AGDC is actively engaged with all three, Meyer said, referring to AGDC’s former partners - BP, ConocoPhillips and ExxonMobil.
He said BP has called North Slope natural gas its largest unbooked resource and noted that until there is a way to move the gas to market, it cannot be booked as reserves.
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