US FERC Sets Alaska LNG EIS Meetings

Amidst growing concerns surrounding the viability of the ambitious Alaska LNG project, the US Federal Energy Regulatory Commission (Ferc) said July 26 it will hold a series of public meetings in September to gather public comment on the project’s draft environmental impact statement, issued in late June.

Meetings will be held September 9-11 in six communities along the route of the 806-mile pipeline that will deliver gas from Alaska’s North Slope to the 20mn mt/yr liquefaction terminal on the Kenai Peninsula. Two more sessions will be held September 12 in Fairbanks and Anchorage.

The following week, the US Bureau of Land Management will hold public subsistence hearings and seek public testimony in two potentially affected communities as part of its examination of the project as it pertains to the Alaska National Interest Lands Conservation Act.

The $43bn capital cost of the project – some reports suggest it could be as high as $60bn – has been a significant barrier to the project’s development since former Alaska governor Bill Walker and various Chinese interests signed a joint development agreement in front of US president Donald Trump and Chinese president Xi Jinping in November 2017.

"It's a large project at 20mn mt/yr of capacity, with an 800-mile pipeline,” Kerry-Anne Shanks, Wood Mackenzie’s head of gas research Asia, said after the agreement was signed. “Sinopec may be able to secure cheaper LNG supply elsewhere.” 

Alaska Gasline Development Corporation, the state agency mandated by Walker to pursue the project when its initial producer backers, BP, ExxonMobil and ConocoPhillips, withdrew in 2016, has been unable to secure additional commercial support, and Alaska’s new governor, Michael Dunleavy, has said the project is too large and complex for the state to manage.

BP and ExxonMobil have agreed to supply gas to the project and will work with AGDC to advance the regulatory process, but have so far not committed to reinvesting in it.

Tokyo Gas and PetroVietnam have both signed non-binding agreements to take a portion of Alaska LNG’s output, while Sinopec, as a signatory to the 2017 joint development agreement, was also in an off-taker position. Walker, while still governor, is also reported to have signed as many as 15 early stage agreements with potential investors and customers.

All of the agreements, including the joint development agreement with China, were non-binding and speculation exists that Sinopec has already backed away. AGDC has said only that some of the agreements Walker signed remain in effect, while others have been allowed to expire.

AGDC itself has significantly down-sized since the agreement was signed. From a full-time staff of 26 under Walker’s administration the agency now has a technical staff of just eight, who are complemented by as many as 12 contractors as needed.

The main goal of those eight employees, interim AGDC CEO Joe Dubler said in a statement to Anchorage Daily News earlier this month, is to win Ferc approval of the project.

“Completing the permitting process will substantially de-risk Alaska LNG and open the door to a wider range of potential project parties with the broad expertise required to unlock the value and manage the risks associated with a project of this magnitude,” Dubler said.