On April 20th, the Alaska Legislature passed legislation (SB 138) approving the State’s participation in a five party agreement with Van Ness Feldman client TransCanada, along with Exxon Mobil, BP, and ConocoPhillips to develop and construct one of the world’s largest LNG projects to export natural gas from the North Slope of Alaska to LNG markets in Asia.
“By passing SB 138, the legislature has put Alaska on a path to controlling her own destiny by becoming an owner in the Alaska LNG Project. Alaskans have waited a long time for a gasline, and for the first time in our history, we have alignment, authorization from the legislature, and a clear path forward," said Gov. Sean Parnell.
The project will now move into the engineering and design phase to further refine the cost and engineering aspects of the project. Senate Bill 138 affirms the commercial agreement signed by the state, the Alaska Gasline Development Corporation (AGDC), the producers, and TransCanada to advance the Alaska LNG Project.
The producers and TransCanada estimate construction costs of the Alaska LNG project at $45 billion to $65 billion (2012 dollars) to cover:
- One of the world's largest gas treatment plants on the North Slope to remove carbon dioxide and other impurities.
- About 800 miles of pipeline and eight compressor stations to move the gas to a liquefaction plant about 60 air miles south of Anchorage.
- The liquefaction plant, which would be among the world’s largest and will include three production lines with a total output capacity of 15 million to 18 million metric tons of LNG per year.
- LNG storage tanks and two tanker berths at the liquefaction site.
The pipeline would have at least five points along the route where Alaska municipalities, utilities and commercial customers could take gas for local distribution. The state will decide the locations of those offtake points later.
Alaskans have long talked and dreamed of a pipeline to move North Slope gas to market and have seen multiple proposals come and go over the past 40 years. High development costs and lack of gas buyers to pay those costs have been the problem, but rising demand for LNG in Asia may create enough of a market opportunity for an Alaska project to succeed.