Alaska LNG corporation seeks new sponsor for gas line project or it could sell off the assets

Alaska LNG corporation seeks new sponsor for gas line project or it could sell off the assets

The state corporation that has been leading the proposed multibillion-dollar Alaska North Slope natural gas project since late 2016 wants someone else to take over the development effort. The corporation’s plan assumes that an economic analysis currently underway determines the project is economically viable.

If no one steps up to take over from the state, which has been paying just about all the bills the past four years, the Alaska Gasline Development Corp. board of directors appears ready to sell off the project’s assets — which could include permits, studies and engineering work — in a formal bidding procedure.

The first step in the unfolding process is an update to the 3-year-old, $43 billion cost estimate for the Alaska LNG project that would transport North Slope gas through more than 800 miles of pipeline to a liquefaction plant and marine terminal in Nikiski. Fluor, a 108-year-old global engineering and construction company, is under contract to AGDC to prepare the update. The state corporation expects to receive Fluor’s numbers later this month and, after review by its own team, will present them at its June board meeting.

Fluor, based in Texas, is experienced in LNG plant construction. It’s part of a joint venture that was awarded the engineering, fabrication and construction contract for the $30 billion Shell-led LNG Canada project under construction in Kitimat, British Columbia, about 100 miles southeast of Alaska’s southern border with Canada.

The AGDC board on April 9 approved a resolution adopting a strategic plan to direct state involvement in the Alaska LNG project through June 2021. The document itself is confidential, but the board reviewed in public session the underlying assumptions of the plan.

  • The updated cost estimate is complete by June. AGDC has been working — with help the past year from BP and ExxonMobil — to reduce construction costs in hopes of making the project economically viable, and has talked up Fluor’s upcoming estimate as potentially validating its work. Project construction and operation costs, and the price of gas going into the liquefaction plant, are the biggest drivers of the final sales price for the LNG.

https://www.adn.com/business-economy/energy/2020/05/18/alaska-seeks-new-sponsor-for-lng-project-or-it-could-sell-off-the-assets/

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