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The U.S. Federal Energy Regulatory Commission (FERC) approved this week the construction and operation of the Alaska LNG project estimated at US$43 billion, which has been years in the planning but still lacks investor commitments for its completion.
FERC authorized on Thursday the Alaska Gasline Development Corporation (AGDC)—an independent, public corporation of the State of Alaska—to liquefy and export liquefied natural gas (LNG) from the North Slope to an export facility in Nikiski, Alaska.
The Alaska LNG Project consists of a Gas Treatment Plant on Alaska’s North Slope, an 800-mile pipeline, and an LNG facility in Nikiski, Alaska, and is estimated to cost US$43.4 billion.
Commenting on FERC’s project authorization, Alaska Governor Mike Dunleavy said:
“Today’s federal authorization is a key step in determining if Alaska LNG is competitive and economically beneficial for Alaska. I commend the AGDC team for their diligence. The ongoing project economic review and discussions with potential partners will determine the next steps for this project.”
“Our momentum continues as we complete our assessment of the project’s economics and competitiveness, and engage with potential project partners to determine the best path forward for the Alaska LNG Project,” said AGDC President Frank Richards.
The project was first proposed in 2014, but in 2016 the partners in the project, ExxonMobil, BP, ConocoPhillips, and TransCanada, withdrew as potential investors and the state of Alaska took over the project.
According to Alex DeMarban of Anchorage Daily News, FERC’s authorization of the project could be a key step for a potential sale of the project to investors or buyers.
However, considering the current state of the global LNG market with prices at record lows and demand sluggish in the COVID-19 pandemic, investors may not be rushing to pour billions of US dollars to complete the project, all the more so that oil and gas supermajors are tightening their belts after the oil price crash in March.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.