This week the board of the Alaska Industrial Development and Export Authority (AIDEA) passed a resolution supporting the development of Alaska LNG Phase 1, the in-state pipeline portion of Alaska LNG (liquified natural gas) designed to bring North Slope natural gas to Interior and Southcentral Alaska.
The resolution authorizes AIDEA to negotiate and sign a letter of credit to backstop front-end engineering and design, also known as FEED, for the Alaska LNG pipeline, bringing Alaska a critical step closer toward a privately funded in-state natural gas pipeline.
The letter of credit allows the Alaska Gasline Development Corp. to unlock up to $50 million in private investment needed to move the Alaska LNG pipeline through FEED, the remaining development stage that must be completed before a final investment decision can be made.
AGDC is in advanced discussions with potential project partners to privately fund and complete FEED and will announce updates when new developments occur. The letter of credit for FEED will only be utilized if a final investment decision is not reached, at which time AGDC will own the completed pipeline engineering and design work.
“The State of Alaska is facing a looming energy crisis and Alaska LNG represents the best long-term energy solution for our state. The Alaska LNG pipeline will deliver reliable, affordable, low-emissions energy and uniquely provide billions of dollars in economic benefits for Alaskans. Building the Alaska LNG pipeline also strategically positions Alaska to increase the energy security of our Pacific allies by derisking construction of the other Alaska LNG components that will generate and commercially export LNG,” AGDC said in a statement about the development.
The LNG pipeline initial phase of development, long tied up in government entanglements, comes at a time when Southcentral and the Railbelt in Alaska are running out of Cook Inlet natural gas and are on the verge of needing to import it. It also comes at a time when the price of natural gas is predicted to surge due to high demand, tight supply, and the Biden Administration crackdown on production.
A waste of money as the pipeline will cost way to much specially when you add in all the court costs.
Spend the money on Cook Inlet gas bedside the infrastructure is already in place.
Who gets the money?
Who is buying who?
Really.
More Alaska taxpayer money squandered on b.s..
How many times have we seen this in the last 20 years, seriously?
Feds won’t let us do it, unfortunately.
We are heading towards a real crisis – we need a “Trump” style governor that can really work the system, the press, social media, the financial system, and the will of the people.
Done: Any names come to mind?
That is, name or names of viable gubernatorial candidate who might get something done.
Just as long as they don’t try to sell Alaska to China like Bill***. was going to do..
Another winner project supported by AEIDA. For a summary of all of the others, see the yet-to-be-published-and-maybe-never-will-be Northern Economics report on the past performance of other AEIDA-underwritten projects.
It’s time to contract for the LNG and the regas ship, and get on with the bits to hook it all up to the Southcentral gas system. 800 miles of big bore isn’t gonna happen in a few years, and even if it does and the LNG portion fails, 300,000 people will have a pretty big project to pay off.
Anybody feelin’ the chill yet?
Dogster: you’re being way, way too hard on Randy and his merry band of big spenders at AIDEA.
Be nice!
Tis the season to be jolly.
AIDEA is just in the spirit of the season, i.e., it is better to give away than to receive.
No doubt the design engineering consultants and lobbyists are happy with this development but AIDEA’s batting average on its large scale projects is close to zero. Why is this project any different?
There is no global private capital shortage for energy development projects with attractive risk adjusted returns. AIDEA has always been the chump for projects that more sophisticated, non politically motivated investors decline.
Pete Brown: sound analysis.
Not likely to stop AIDEA from continuing long run of bad “investments.”
It could be worse, I suppose. We could have the Permanent Fund Trustees leverage the PF and try to jam through financing and construction of a gas line.
Nah! They wouldn’t be that goofy.
Would they??
Time will tell.
Brings to mind Ross Perot’s invocation about a “giant sucking sound.”
His reference was to loss of jobs.
The sucking sound apparent up here in Alaska is derived from AIDEA and the fabulous waste of public funds.
Oh well, good thing we can afford this silliness.
The AIDEA has a report that it refuses to release to the public on its autocratic capabilities which costs $250,000 to AIDEA. Evidently, the report is important but to those who have a need to know, its locked away. We have a Governor whose shady practices have always put a veil over critical and important business practices and use, deliberately keeping everyone in the dark. Dunleavy has done his best in the fraud, waste and abuse by allowing use of monies for business ventures to less than qualifying businesses. Dunleavy’s practices absolutely stink!
DK: Are you saying he twice elected people’s choice is failing to promote the public interest?
He’s doing his best.
It’s Christmas. Be merry and charitable.
The boys over at SIDEA are doing their best to give away presents.
Government pigs at the trough will never step away from the trough.
Would you choose to NOT continue your government-funded cushy do-nothing job? You wouldn’t; you would continue eating at the trough.
So will AIDEA and AGDC. Oink oink.
So much money has been thrown at this gas line already I am cool with “risking” another measly $50 Million.
I like the idea that a pipeline company instead of a producer might find a way to make it profitable. No doubt the State will be asked for some level of risk support in the end.
The main purpose for the gas should be to lower energy costs for residents and industrial processing businesses.
Also use the gas right there on the slope for HVDC power generation and industrial manufacturing (fertilizer, plastics etc.). Carbon sequestration needs to factor in as well.
well at least its not 500 million
Chris: You make excellent policy points that are right in line with standard Marxist economic theory.
But it’s the holiday season. We should all be charitable and quintuple down on foolish giving to outfits via AIDEA.
In the spirit of holiday gift giving, let’s hope Governor Dunleavy will promulgate an executive order renaming AIDEA to SIDEA.
WHAT’s not to love about having having a government agency titled: Santa’s Industrial Development & Export Authority?
After all, Santa’s been in the remote manufacturing and delivery business and doing really well for a long, long time.
Merry Christmas to all and will the last person to depart Alaska after AIDEA runs the economy into a death spiral remember to switch off the lights.
Carbon Sequestration is a bs scheme concocted by DEVOS (big ego no-talent big-headed inbred) types from countries w/nothing to harvest & aimed at milking mineral rich countries to finance their low IQ schemes! promoted by big pipe companies…who., once the pipes are again needed for oil transport, will shut up about carbon sequestration!
Joe you made 5 comments to this article it seems you have a vested interest to either protect ” Randy and his merry band of big spenders at AIDEA.” Be Nice ! or think ” give away presents.” may be just the thing Dunleavy is promoting the public interest? It’s maybe that sarcasm(s) during Christmas are fashionable by adding the two together ? Either way, building a pipeline the “right way ” should be the “fashion of free enterprise ” if that’s your drift!
I have spent some of my whole life 60 plus years, in Alaska Heavy Construction, actually building Roads , INFRASTRUCTURE & pipelines and yes Pete Brown you have something there… does the ( AIDEA ) or SIDEA as Joe calls them following market driven free enterprise conventual wisdom might say otherwise. Greasing the skids doesn’t hurt sometimes but with our PFD money? Joe where is your comment on that this Christmas season…will little JOEY get his Teddy Bear or Dump Truck this year?
EdMarJr.: revisit your comment in the morning and see if you can gather your thoughts into something coherent and then make your points or ask a question or two if you will.
It is imperative that WE get this gas line built and now. Either that or we need some big ass coal fired plants built. Or both. Gas line to Valdez with a spur line down from glennallen to south central. 28”line is optimum. Let’s build the damn thing and quit wagging our jaws.
In the last 10 years from December 2014 until now there were 13 months where liquified natural gas sold above $10.00/MMBtu. I don’t remember the exact cost to liquify and send gas from the North Slope to Nikiski but it was somewhere close to $3.00/MMBtu, then you have to transport from there. As much as I’d love to see Alaska become a massive natural gas exporter, this isn’t the project that is needed. If AIDEA needs to spend money they should spend it to develop a project that makes financial sense and a project that starts off as a money losing project more than half the time does not make sense. Developing gas in Cook Inlet where there is already infrastructure and where it would have the largest impact to industrial development (energy costs) for the largest percentage of the state makes the most financial sense. If energy prices were lower due to the use of locally supplied natural gas then larger industrial producers could make an impact, but large bureaucracies being what they are it makes sense they’d prefer to waste money instead of doing something impactful for regular Alaskans.
Why exactly are still considering building a LNG Pipeline, with Compressor Stations, from the North Slope to South Central? Why not construct the facilities on the North Slope and ship the LNG from the North Slope, utilizing Ice Breakers? The Ruskies do it, why can’t we do it, completely eliminating the costly Pipeline and Compressor Stations?
That makes sense Rob; except what about all the friends & relatives who will get left out of the side projects?
PS: ur right about Melanie Joly; I’ll bet she’s smart too … what a bonus!
Ship it out of North Slope directly
Like building a coal power plant at our University. Or not having rail to anywhere. Fu@k, our US Army cant even have a PLANED yearly exercise without fing it up. A State isnt meant to be rich by making lives of constituents & Earth a worse place. Alaska does just that.
Alaska is mismanaged white, green & blue collar crime.
Completely uneconomical project. Absolutely zero chance of selling natural gas at $30/MMbtu, when you can buy it in Louisiana and have it delivered to Anchorage for $12.50/MMbtu. Any 6th grade kid, if you gave them the costs and potential income from the gas, could show the complete idiocy of pursuing this failed idea. All that is happening, and that has happened, is the continual payment to certain individuals for nothing. The fact that the failed AIDEC, which hasn’t had a project that ever paid back what that failed organization has cost the state is backing this idiocy, should only further inform the people getting their PFD stolen every year that they are being had. Just for comparison, Enstar now charges about $23/MMbtu at the retail level, if you adjust the cost for the extra charges they charge to deliver it to you home.
One Question. What price will gas have to be to make the gas line economic? Years ago it was $11.00 a thousand. Today you can double that. Thats all you need to know.
oops! Joly not Poly.