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AGDC advances work toward FERC permits
Issue of whether Alaska LNG project is economic not resolved; staff met with BP, Exxon in April, but workshop results not public
Kristen Nelson Petroleum News
The Alaska Gasline Development Corp. board met May 22 in Anchorage and heard an update on the work the corporation is doing to obtain permitting for the project from the Federal Energy Regulatory Commission and other agencies, but there was little discussion in the public portion of the meeting of the big issue - whether the project is economic.
Joe Dubler, AGDC’s interim president, said the competitive assessment was being done. There are preliminary indications, he said, and those will be presented in executive session. He said results of the competitive assessment will be public at some point, but not yet.
When AGDC reorganized under a new board in January one of the goals was to get the North Slope producers involved in the project again. BP and ExxonMobil signed non-binding memorandums of understanding.
Part of that MOU, Dubler said, was to get engineers from the parties together, to go over cost items in the work program and budget and figure out changes in the industry over the last three years that have provided an opportunity to reduce costs.
In April, engineers from AGDC, BP and ExxonMobil met in Houston for what Frank Richards, AGDC senior vice president of program management, called a workshop.
Richards said the goal of the cost-reduction workshop was to look at costs, because the last cost estimate was based on 2015 numbers. The workshop looked at new market conditions, technology advancements - opportunities for cost reductions, he said, using publicly available information.
He called the output of the three-day workshop positive and said more information would be provided to the board in the executive session. Multiple engineers from each organization attended, along with a commercial person from each group.
Consolidation continues AGDC continues its consolidation. Dubler said the May 22 meeting was the last to be held in the AGDC conference room, as space on that floor was being eliminated, with staff finishing a move to a single floor the week of the meeting. Future board meetings will be in the Atwood Building, he said.
Richards said AGDC has reduced its costs and built a “fit-for-purpose team” to address FERC’s informational needs. He said AGDC has been reducing staff from fulltime to part-time and from part-time to no time, changes which are reflected in the organization’s financials.
Operating budget figures show a fiscal year-to-date budget of $7.791 million, with actuals at $7.09 million, an underspend of $702,000.
Commercial plans Dubler said AGDC is looking for the right mix of investors and doesn’t believe a reliance on one company or country for 75% is the right mix. He said AGDC went to LNG2019 in Shanghai and had non-stop meetings for four days with shippers, utilities, producers and builders. BP and ExxonMobil sent representatives with AGDC to meet with potential investors, he said.
AGDC provided an update on its new management at LNG2019, on the stage-gate approach and on its efforts with BP and ExxonMobil.
In June AGDC representatives will be traveling to China with a representative of the governor’s office and the commissioners of the Department of Natural Resources and the Department of Revenue to meet with potential China partners to discuss the state’s role in the project and how they see it going forward, Dubler said.
He said AGDC’s top priority for 2019 is staying on track for 2020 FERC authorization.
Richards said FERC’s draft environmental impact statement is expected in June. That will kick off a 90-day public comment period with FERC-hosted public meetings. A final EIS is expected in March 2020.
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