The Alaska LNG Project is one step closer to reality, with the announcement Monday that the Alaska Gasline Development Corporation had come to an agreement with an energy company to lead and fund the development.
“I’m announcing that AGDC has reached an exclusive framework agreement with a qualified energy company to privately lead and fund the development of the Alaska LNG project, including the Arctic carbon capture plan on the North Slope, the LNG export facility in Nikiski, and the pipeline,” Alaska Gasline Development Corporation Frank Richards said during a press conference hosted by Gov. Mike Dunleavy. “The terms of the framework agreement are being negotiated or have been negotiated; the next step is for both parties to create a legally binding development agreement that will move the project forward.”
Until that agreement is finalized, Richards said, the state and AGDC will not name the company they are negotiating with. He said a “formal announcement” may be forthcoming “within the next few months.”
Richards said that this agreement was only secured because of the recent creation of a $50 million line of credit issued to AGDC by the Alaska Industrial Development and Export Authority.
Richards told the Alaska Legislature’s House Resources Committee in November that an unnamed partner, seemingly the same he referred to this week, wouldn’t pursue the project unless the state could provide assurance funding — if that partner completes the design work and then decides not to develop the pipeline, the state will pay them back their expenses, limiting their necessary investment in the project. AIDEA secured the line of credit in December to be used for that purpose.
A study by Wood Mackenzie, touted by AGDC as indication that the project should move forward, says that a 765-mile pipeline with a diameter of 42 inches would cost $10.8 billion but could provide gas as soon as 2031 at a cost lower than importing gas, also providing more jobs than an importing terminal. Local utilities have warned of a shortfall of natural gas as soon as 2026.
To bridge the gap, Dunleavy on Monday said that the Alaska Legislature will need to provide further incentives to local suppliers to drive increased production in Cook Inlet.
The gasline has been discussed “for decades and decades and decades,” he said, noting that those conversations have been at times unfruitful. He characterized the advancement as “not just theoretical, but actual, significant movement.”
John Sims, president of Enstar Natural Gas Company, said during the press conference that his utility had expanded its storage facility for natural gas in Kenai, entered into a new agreement with Hex Furie for gas that’s more expensive than the typical range and has explored importing gas locally. Sims said that Enstar has entered into an agreement with another unnamed entity to provide gas imports “as a bridge solution.”
That entity seems to be Excelerate Energy, who have repeatedly in 2024 described their plans to create an integrated liquefied natural gas import terminal in lower Cook Inlet using a floating storage regasification unit in the inlet and a local import facility. During an earnings call on Nov. 7, Excelerate leadership said that they were working with local utilities and state officials to design the import terminal, “the best solution to meeting the state’s near-term needs and helping Alaskans bridge to their energy future.”
Enstar has declined to respond to questions about whether they’re working with Excelerate.
A full recording of the press conference is available at the governor’s Facebook page, “Governor Mike Dunleavy.”
Reach reporter Jake Dye at jacob.dye@peninsulaclarion.com.
