Details recently released by the Alaska Gasline Development Agency show that China would get 75 percent of the gas from the Alaska LNG gasline, and Asian markets would get the other 25 percent.
The project, originally targeted for startup in 2025, has been hurried ahead by two years since Gov. Bill Walker and AGDC President Keith Meyer visited China earlier this month and signed a “joint development agreement.”
In a Nov. 16 letter, AGDC has urged the Federal Energy Regulatory Commission to fast track the environmental review of the Alaska LNG gas line project, including issuing a schedule for the environmental impact statement process by Dec. 15.
AGDC submitted its application to FERC in April and has been answering myriad questions the federal agency has posed ever since.
Alaska LNG project is an integrated gas infrastructure system with three major components, including a gas treatment plant at Prudhoe Bay, an 800-mile pipeline from the North Slope to Nikiski, and a liquefaction terminal.
Meyer has asked FERC to finish the environmental impact statement by the Dec. 31, 2018, so the state can start exporting LNG by 2023.
Funding for AGDC is dependent upon appropriation by the Alaska Legislature. The agency has enough funding to stay open until the end of this fiscal year, June 30, but its future is uncertain after that. Funding, during a time of state fiscal crunch, may not be supported by the Alaska Legislature.
Originally, AGDC was one fifth owner of the project, but bought out TransCanada’s share and became one fourth owner, with BP, ConocoPhillips, and ExxonMobil. But the three oil companies said the project was not ripe for development due to current market conditions, and Gov. Bill Walker showed them the door in 2016. It’s now a state-owned project, with Gov. Bill Walker courting China as both the investor and customer.
Prices for natural gas are low, and getting FERC approvals are likely to be lengthy and expensive. Even after the final EIS is issued, environmental groups are already staging themselves to hold the project up in court, and could stall it for years.
Earlier, the governor said that 2025 was the target date for gas exports. But Walker has sought a $40 billion loan guarantee from the Trump Administration for the project, as part of Trump’s infrastructure program.
Details of the governor’s joint development agreement with the Chinese show that China is not obligated to any agreement or to expend any funds on the project.
Some 75 percent of the project debt financing from the Chinese would be in exchange for 75 percent of the gasline’s capacity for the life of the loan, with the remaining 25 percent reserved for AGDC to sell to other Asian markets.
With 100 percent of capacity awarded, the governor’s current plan shows no gas available for Alaska to bring down the cost of energy and provide energy for other development projects, such as the Donlin mine. In the original configuration of the gasline project, there were five offtake points for Alaska communities.