Alaska LNG Pipeline (AKLNG)

This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor and the Center for Media and Democracy.

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Alaska LNG Pipeline (AKLNG) is a proposed natural gas pipeline. There have been no development updates since 2017 and the project is presumed to be shelved.

Location

The pipeline runs from Point Thomson, Alaska, to Nikiski, Alaska.

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Project Details

• Operator: Alaska Gasline Development Corp (AGDC)
• Proposed capacity: 3300 Million cubic feet per day
• Length: 804 miles / 1293 km
• Status: Shelved
• Start Year: 2025

History

The pipeline project began as a joint-venture between North Slope producers Exxon Mobil Corp., BP Alaska,ConocoPhillips Co, and state-owned Alaska Gasline Development Corp. (AGDC). However, by late 2016, AGDC was the only company remaining in the development of the pipeline project. The pipeline project was projected to cost $45-$65 billion and was seen as a crucial method to increase the state's revenue after years of slowing crude oil production. The project had been originally conceived in 2014 when crude oil was $115 a barrel, with demand soaring in Asia concurrently. The three oil companies dismissed the project's viability due to the continuing trend of low energy prices and the enormous capital necessary to realize the project, causing the producers to leave the project.

Despite the major setback for the pipeline project, AGDC has planned to continue with the project. Governor Walker of Alaska met with representatives of a number of Asian countries such as Singapore, Japan, South Korea, and China in order to create support and legitimacy for the project. The project has been in a state of transition since the end of 2016 and has continued to face scrutiny of its viability by the Alaskan State legislature. Ultimately the project could be derailed if new investors are not found in the near future.

There have been no development updates since 2017 and the project is presumed to be shelved.

Background

If the Alaska LNG project materializes, it would be among the world’s largest natural gas development projects. The project will consist of a gas treatment plant at Prudhoe Bay, an 800-mile pipeline, 42-inch diameter pipeline to Southcentral Alaska with up to five offtakes for in-state use, and a natural gas liquefaction plant in Nikiski to produce liquefied natural gas (LNG) for export. The LNG plant in Nikiski will be the largest component of the mega-project. The pipeline would be built to carry 3 billion to 3.5 billion cubic feet of natural gas per day. The liquefaction plant would have the capacity to make up to 20 million metric tons a year of LNG (about 2.5 billion cubic feet a day of gas).

The pipeline will be approximately 800 miles long and as of 2017, is being led by the Alaskan state-owned company AGDC. The AGDC projects that the pipeline construction will begin in 2019 and permitting will finish by the end of 2018. Currently, AGDC is still in the process of acquiring 600 acres of land which were purchased by the three oil producing companies that left the project in 2016. The project requires approximately 800 to 900 acres of land. The land presently belongs to a subsidiary company — Alaska LNG, LLC — which ConocoPhillips, BP, and ExxonMobile had created to own the project’s land, website, and Department of Energy export license. The ease and speed of the land purchase will may determine the state legislature and other investors to continue with the project.

In April 2017, the AGDC filed its Natural Gas Act Section 3 permit application with FERC for for the Alaska LNG Project, furthering its progress to capitalize on the the North Slope gas reserves. The Federal Energy Regulatory Commission is expected to soon publish a schedule for the National Environmental Protection Act review for the project in the Federal Register. The schedule will outline the timeline for a draft environmental impact statement (EIS), expected to be about 12 months, and a final EIS, expected about six months later. AGDC also filed permit applications with four additional federal agencies: the Pipeline and Hazardous Materials Safety Administration, Army Corps of Engineers, Bureau of Land Management, and National Marine Fisheries Service.

There have been no development updates since 2017 and the project is presumed to be shelved.

Pipeline Route Alternatives

The City of Valdez was the only municipality to file a motion to intervene. The city of Valdez believes that it is the best location for the pipeline's terminus, rather than the proposed location of Nikiski. The city has claimed that it is a lower-risk and lower-cost option that than the current route, while it also stated that the Valdez route would be less environmentally harmful. However, while route alternatives will be looked at in the FERC proceedings, the AGDC prefers the Nikiski site, as did the North Slope producers who originally chose the Nikiski site before leaving the project.

Opposition

In May, The Sierra Club and Center for Biological Diversity each filed their own motions to intervene in the FERC proceeding, stating that environmental objections against the pipeline, compressor stations, and LNG terminal. The concerns regard increased air pollution, greenhouse gas emissions, risk to wildlife, and disruption to the habitat of fish. The Center for Biological Diversity stated that the Alaska LNG proposal could increase the frequency and occurrence of damaging exploration methods, and threaten local wildlife, including polar bears and whales. The organization also claimed that the LNG project could also lead the way for more intensive hydraulic fracking and drilling the Arctic. Of the nine groups to intervene, two were negative(The Sierra Club and the Center for Biological Diversity) and 7 were positive.