The price tag on the giant Alaska LNG Project is shrinking, Kallanish Energy reports.
Last week, the Alaska Gasline Development Corp. released an updated $38.7 billion cost estimate for the project.
That is a $5.5 billion or 12.4% reduction from the previous $44.2 billion cost estimate, the Alaska state agency said.
The new figure makes liquefied natural gas from Alaska more competitive and will help the project be better able to deliver natural gas to export markets at competitive prices, supporters said.
The new price tag was established during a 14-month review involving third parties and industry experts and also reflects technological changes in the industry, it said.
Parties involved included AGDC staff and representatives from BP, ExxonMobil, and Fluor Corp.
“These updates improve the competitive position of the Alaska LNG Project and its ability to deliver LNG and natural gas at favorable prices,” said AGDS president Frank Richards in a statement.
The company is “incorporating these results into our discussions with potential partners,” he said.
“While today’s results strengthen the case for developing this project, it will ultimately be the market that determines the best path forward,” he said.
On May 21, the Federal Energy Regulatory Commission gave final approval for the project.
It is designed to move natural gas from Alaska’s North Slope to Asia for export.
The project would produce 20 million metric tons of LNG per year.
It would include an 807-mile pipeline to move up to 3.9 billion cubic feet of natural gas per day, a gas-treatment plant in Prudhoe Bay on the North Slope, and liquefaction facilities on the Kenai Peninsula in southern Alaska.
It would also require two additional pipelines connecting production units to the gas-treatment plant.
Alaska LNG, first proposed six years ago, is one of the biggest LNG projects in the world.
The project is intended to commercialize the large volumes of stranded natural gas found in Alaska’s North Slope.
The state has been seeking a way to develop that gas since the late 1970s because there are no local markets and no developed infrastructure to get the gas to markets.
It is estimated that the North Slope’s Prudhoe Bay and Point Thompson together hold 30 trillion cubic feet of natural gas.
The project would provide a major revenue source for Alaska.
The state took over the project in 2017 from BP, ConocoPhillips, ExxonMobil, and TC Energy. (June 29, 2020)
ALASKA - LNG - PRICE