Glenfarne, the company that has an agreement with the Alaska Gasline Development Corporation to move a gasline forward for Alaska, will not be needing the $50 million guarantee that the Alaska Industrial Development and Export Authority had offered.
That news was relayed in a House committee today by AGDC President Frank Richards.
Glenfarne, the new majority owner and lead developer of the Alaska LNG project, will proceed without the previously approved $50 million financial backstop, a development that takes that off the table as criticism of the project. Some critics had said that Glenfarne didn’t have enough skin in the game, if that guarantee was in place.
Glenfarne had inherited that $50 million backstop guarantee from an agreement with an earlier pipeline builder, a builder that was only interested in doing the narrower building portion of the project, which had a lot more financial risk associate with it.
Richards told the House Resources Committee that Glenfarne is going to seek private financing for the entire project and won’t need to be reimbursed for the front-end engineering and design portion if the project does not reach a final investment decision.
The Alaska LNG project has received all major federal permits, and may eventually deliver up to 3.3 billion cubic feet of gas per day, some for Alaska and some for export. With Glenfarne’s leadership and financial commitment, the project is moving quickly toward that prized “final investment decision.” That decision is expected later this year.
This is the right way forward. If the project makes sense, and it does, the private sector should fund it. Energy sources are the keys to unlocking the mineral wealth of Alaska because all of the projects will demand high density reasonable cost power. To bring major projects on-line this is required. Looks like the begining of a good partnership!
I’m sure Mark Begich will take that money if they don’t.
Paper is one thing. Steel is another.
I would be interested to know who is funding Glenfarne and what country do they have alliance with!
See ‘https://glenfarnegroup.com/about-us/ and https://www.glenfarneenergytransition.com/Our-Business2/default.aspx.
Our luck probably China
Glenfarne Group is a New York City and Houston, Texas based company. They operate in South America, Korea, Central America, Asia and Europe. They have extensive experience in the energy field and pipelines.
Glenfarne is pledging a portion of the cost, it will cost more eventually to do all the engineering. They are saying they will pay now BUT Alaska’s guarantee of the return of money spent is still on the books if they walk away from the project. Additionally they have very lucrative and simpler project on the Gulf of Mexico coast that make more sense. “The project is eligible for an 80% federal loan guarantee, authorized by the Infrastructure Investment and Jobs Act. Should Glenfarne decline to move forward with Alaska LNG, the company will be able to collect up to $50 million from a “backstop” fund established by the Alaska development entity last DecemberIt is not going to be built.” (‘https://www.enr.com/articles/60561-developer-glenfarne-buys-most-of-alaska-lng-project-estimated-at-44b) Long term contracts with Asian buyers need to be in place prior to any construction. We just slapped them with tariffs and are creating market instability here. Are we going to be able to extort them into contracts? Kitimat BC just came online exporting to Asia, Western Australia is booming and has considerable reserves that require less infrastructure, both these counties are proving to be more stabile and trustworthy trading partners. It remains a pipe dream.
Mark,
No, “Long term contracts with Asian buyers … ” DO NOT “…need to be in place prior to any construction.” Take a look at the Alaska LNG website where the Wood McKenzie report is posted.
This project is fundamentally different than past attempts for an Alaskan LNG line. Phase I consists ONLY of the pipe ($10B, estimates to be updated) and not the whole project (additional $35B, for a total project cost of $45B, again to be updated).
The economics of Phase I are based on South Central and the need for gas with the decline in Cook Inlet production. We are in the process of importing gas now for electric generation, industrial uses and heating. When (if?) the Phase I pipeline is built, it will be competitive with imported gas. This is the economics that will drive the pipeline portion of the project. The Interior is trying to get a tap off the line to serve Fairbanks as well. The more the merrier.
At that point, we have a pipe. That’s when we (Glenfarne, the state, whoever) needs to go out and find customers for the exported gas. Obviously, this would be great for the state, and southcentral, as more volume will be in the pipe with exports to drop the cost for Alaska users, given that the cost of the pipe would then be amortized over a larger volume.
If there are no overseas buyers, we have a pipe without the gas conditioning and liquification equipment (Phase II).
Its a nice project since the state and Glenfarne have a couple of places to evaluate if they should move forward. I’m as big a skeptic as anyone on these things but this one is set up nicely to succeed, assuming all the numbers come back as expected.
The pipe is not a dream.
‘https://agdc.us/wp-content/uploads/2024/09/2024.09.10-WM-AGDC-Alaska-LNG-Phase-1.pdf
I’m invested in the company that will supply the gas should the funds be secured to finance the project,
Pantheon Resources listed on London’s AIM Market(ticker PANR) and on the OTC in the USA(ticker PTHRF)
To put the $50 million in perspective, the North Slope School District spends more than that for 4 years of internet access!
Big question is what do the owners of gas have to say ? Nothing so far , no gas contract , no gas pipeline. I am waiting with bated breath .
No politician has ever produced a drop of oil in Alaska . No governor has either , only oil producers and the list includes very few Alaskans .
Never going to happen.
I’ve been in the oil and gas business and never heard of Glenfarne up until a month ago.
Notice how Exxon, ConocoPhillips, Hilcorp, ENI, and the rest of them – not a peep….