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Producers align for Alaska LNG Project

Posted: February 3, 2014 - 2:11pm  |  Updated: February 5, 2014 - 11:40am

The latest proposal for an Alaska gas line project may be clearer now since project leaders for the Alaska LNG Project made public presentations last week at the Kenai Chamber of Commerce luncheon and addressed the Industry Outlook Forum. Senior project manager Steve Butt addressed the public skepticism of yet another project, “It’s best to remember that this project has been worked on for a long time by a lot of really good people and the Alaska LNG Project is currently being worked by representatives from BP, ConocoPhillips, ExxonMobile, Trans Canada and following the Governor’s recent announcement of legislation he has introduced the State of Alaska. So for the first time ever you have all four of the resource owners who own the primary gas in the North Slope working together and with the pieces coming together we have a chance to make something happen that has never been there before,” Butt told the Dispatch in an interview. “However, there are still a lot of significant risks in front of us and we need a lot of help from the State and we need a lot of help from the people to create the right environment so that the investors want to make it happen. We need folks to say that this project is important to them and that they see the benefits of it,” he said.

According to State Natural Resources Commissioner Joe Balash if the project moves forward, the state could earn $2 billion to $3 billion yearly in new revenues from gas sales. Under the plan the state would commit to take its one-eighth royalty share of gas production in kind or in the form of gas for the duration of the project and also take state production taxes as a share of the gas. Dan Fauske, president of the Alaska Gasline Development Corp. which has been proposing an Alaska Stand Alone Pipeline know as ASAP told the Dispatch, “This means we have another opportunity that has been place before us at a much grander scale and that we’ve been given clear direction by the Governor and my board to work toward alignment to figure out how the two projects align and that ASAP remains an ace in the hole. ASAP has given leverage to the state, we are now making incredible progress and are a valuable player at the table because we have assets now we have environmental impact statements, engineering data and stuff that can be utilized if this other project continues to move forward we have things that can help develop that project and if it doesn’t go we keep ASAP on track and I’ll work to keep the projects moving forward for the people of the state,” said Fauske.

“I don’t view it as a competitive situation, I view it as an opportunity to cooperate with the Alaska Gasline Development Corp. they have a lot to offer and we’re looking forward to working with them as a representative of the state. When I look at what I call the arc of success it is all about alignment, risk reduction and cost reduction and that alignment is about getting the four party’s together to reduce uncertainty which reduces risk and that helps reduce cost and when you reduce cost you can get alignment with your market and that will create a project that will be successful over the long term and this is a long term project of enormous scale to the tune of $45-$65 billion dollars so we must work together to get this right,” said Butt. According to Butt the importance of providing gas to Alaskans to lower heating costs in the interior would be addressed with five offtake points along the 800 mile pipeline to provide gas to Alaskans.

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