State formalizes shift to look at Alaska LNG export project
Alaska on Wednesday formally endorsed an effort by TransCanada and three North Slope producers to shift their focus to a pipeline project that could export liquefied natural gas to Asian markets.
The state commissioners of revenue and natural resources agreed[link to the commissioners’ letter] to amend TransCanada’s gas pipeline project plan adopted in 2008 under the Alaska Gasline Inducement Act. While giving the companies time to look at and possibly develop an LNG export project, the commissioners postponed for two years TransCanada’s October 2012 deadline to apply to the Federal Energy Regulatory Commission for authority to build and operate a pipeline that would send North Slope natural gas to Lower 48 markets via Canada.
Last fall, Gov. Sean Parnell asked TransCanada, ExxonMobil, Conoco Phillips and BP to give a new look at an LNG export project in light of low North American natural gas prices and high prices in Asia. On March 30, the companies told Parnell[link to March 30 letter] they were considering an LNG project.
The commissioners said Wednesday the oil companies and TransCanada have committed to completing a serious assessment by Dec. 31, 2012, of interest among producers, explorers, LNG terminal developers and others in the possible export project. Under AGIA, the state will reimburse up to 90 percent of costs incurred in coming months for work on the export proposal.
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Credit: Eric Engman/Fairbanks Daily News-Miner The challenges of distributing North Slope gas to AlaskansA large-volume North Slope natural gas pipeline could supply gas to Alaskans for decades, but delivery would come with an upfront cost of over a billion dollars. A variety of studies in recent years suggest it would be possible to deliver gas from a large pipeline to the state's population center in Anchorage and surrounding areas for about the price consumers there now pay for gas – possibly less. It also suggests that many Fairbanks residents in the state's Interior might see their cost of heating and electricity fall – possibly a lot. For the vast but sparsely populated rural Alaska – whether far from a major North Slope gas pipeline corridor or even along the route – the price of natural gas or propane extracted from the gas could be too high to win customers without state help in covering construction costs. Recent Pipeline Topics |
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