Group plans to bypass Alaska Gasline option, take natural gas to markets by sea - Must Read Alaska
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Wednesday, November 13, 2019
HomeThe 907Group plans to bypass Alaska Gasline option, take natural gas to markets by sea

Group plans to bypass Alaska Gasline option, take natural gas to markets by sea

A company led by former Lt. Gov. Mead Treadwell plans to ship Alaska natural gas from the Point Thomson field on the North Slope across the Arctic Ocean and to markets in Asia, including Japan, Korea, and the Philippines.

Qilak LNG has signed a “heads of agreement” with Exxon, which could provide 560 million standard cubic feet per day to an off-shore liquefaction plant, which would also be a loading terminal for icebreaking tankers.

A similar project is now in full production in Yamal, Russia, with a second such project on the way.

For years, Alaska has been stuck with stranded gas, and the AK-LNG project, an 800-mile pipeline to Nikiski, has been seen as not financially feasible with the prices of natural gas expected to remain low for some time. But shipping natural gas by tanker rather than across land has advantages — some environmental, and some simply market forces that any project must “rock and roll with,” said Treadwell today.

[Read: Elizabeth Warren has a plan to kill Alaska LNG ports]

Shipping natural gas from the Beaufort Sea is also nearly as close to Asia as the Nikiski terminus of the Alaska LNG project, which is only 40 miles closer to some north Asian customers.

The project would require as many as 15 specially built icebreaking tankers, which themselves would be run on LNG. The tankers have heavy propellers that help the vessel crunch through the ice, stern first. When the vessel reaches open water, it can then proceed bow first to its destination.

Treadwell said he had a conversation with Gov. Michael Dunleavy today and said the governor is interested in monetizing Alaska’s gas. By making the gas commercially viable, it would also put more petroleum condensate into the Trans Alaska Pipeline System, which generates royalties and taxes for the state, the North Slope Borough, and Valdez.

[Read: Former Gov. Walker trying to point gasline to Valdez again]

Treadwell and other company executives made the announcement today to a gaggle of reporters in downtown Anchorage, where they are opening an office to complete a feasibility study, environmental impact statement, and export permits that will lead to a final investment decision by 2021. Financing could come form the Bank of Japan; Japan has shown an interest in helping the U.S. balance its trade, and LNG exports could do a lot to correct the imbalance.

Treadwell said the project would not necessarily negate the existing AK-LNG concept. But, he said, “To quote Wally Hickel, I’ll buy the champagne and pop the cork,” if AK-LNG can get off the drawing board. The final environmental impact statement on AK-LNG is due next year from the Federal Energy Regulatory Commission.

Qilak LNG is a subsidiary of Lloyds Energy of Dubai. Lloyds would buy the gas itself from Exxon and bring it to projects that it owns in Asia, such as floating regassification plants or power plants, or to utilities owned by other entities.

The company views natural gas as a bridge fuel, and can help countries in Asia move from less environmentally friendly energy sources such as coal-fired power plants, said David Clarke, former BP executive who is Qilak’s COO and president.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • About time someone started talking sense. Former Governor Wally Hickel convinced me of this at least 15 years ago.

    In recent years living on the coast of the Bering Sea and not seeing ice in the winter, you know this is the way of the future.

    Go get them, Mr. Treadwell.

  • ZACTLY!!! … This is by far ‘thee’ best and most reasonable path forward to actually seeing an Alaska LNG Project. The enormous costs associated with a 800-mi Pipeline and numerous Compressor Stations from the North Slope to tidewater in south central AK kills the economic viability and we’d never see the project come to fruition.

  • I can see where this will work but leaving thousands of Alaskans without another heat source you might wanna reconsider the EPA all together for rules on burning wood or oil

  • Even if —that occasionally private icebreakers were necessary, LNG tankers make the most economic sense. Sadly though it does little to benefit the State other than job creation (jobs that will be a high percentage of non-residents.) I can see also endless arguments over its potential impact to marine life.

    I don’t really have a problem if they try to do it but I don’t understand why we are not progressing to economically develop an in-state gas distribution system that will encourage local industry development and lower cost of living to many Alaska residents? Or perhaps generate power on the north slope distributed around Alaska on HVDC transmission lines

  • The shipping logistics are in our favor (except for the ice). Still perhaps we are not as logistically competitive as Malaysia and Russia.
    I would rather sit on the gas while we develop our own State by leveraging the fact the “people” own a certain amount of the gas in royalties and taxes. We could appropriate some of that income to essentially subsidize the development of a gas distribution system (starting with the Fairbanks hub and Yukon River transportation system. .Or simply sell the gas asset for little to nothing to all in-state uses. There will still be costs for the gas to the consumer through the gas utility system but the raw product value would not be included – this is similar to how ENSTAR shows you how much of your bill is for the gas purchased from private developers.

  • TLP: White. Trains, boats, and gas. Harvard taught facts yet lacks skills. This plan lacks neural networked FAR Part 7.
    Follow the Constitution former Lt. Gov. Mead “ex parte” Treadwell and Alaska.
    Avoidance, tolerance, and ostracism

    • Quit wasting time and money. Foreign competition for NG will shut Alaska out of the market. Ain’t happening. Try selling Alaska icebergs instead. Shorter supply and growing demand

  • Unlike Clem Tillion, and the rest of the old guard…..I think the Dividend would be better invested in infrastructure development and as a Libertarian I am guilty to admit…but there are some social services that are deserving simply due to our duty to help our brothers and sisters.
    Now..I know Clem and his minions believe that we should institute a State Income tax to pay for these services because of our supposed individual share of the oil wealth. This has already been decided against UNAINIMOUSLY by the Alaska Supreme Court. And don’t forget Clem’s original Dividend plan in 1979 was rejected by both the Alaska and United States Supreme Courts. So believe me when I tell you that we CANNOT have an income tax and a Dividend. Now if everyone can get on board with that concept we can then deal with the reality and be more able to come to a rational decision.

  • Or even a Statewide sales tax. It will be constitutionally rejected by the Alaska Supreme Court as an “unjustifiable tax ” under Article 9, Section 6 Finance and Taxation. Read em and weep Dividenders!

  • Well, that’s certainly going to put a crimp in the CBC’s gas-line scheme.

  • We live in a State with a zero income tax. So if you don’t get a Dividend do you really think you have been cheated?
    Would you rather get a Dividend and also pay a State income tax?
    I leave the whole oil taxation issue off the table here. I believe we need to settle the income/sales tax/dividend issue first and then we can proceed to addressing the oil issue. We need to clean our own house first.

  • I don’t want to be appointed as the next Lt. Governor under (pending) Governor Meyer. Sadly, Mike (or perhaps Tuckerman) shut me off because of my moderate idea to resolve the Dividend conundrum. Mike, its not too late………………..Chris

  • Lets not offend your close friend and source of information….I understand. Yeah Clem is part of the problem. We’ll never see that story on mustreasdalaska.com
    Whatever

  • What is the plan to supply Alaskan communities with clean burning natural gas, and lower their utility costs? Fairbanks is constantly dealing with clean air issues, let alone high energy costs. What about all the inland river communities? What about places like Glennallen and their high energy costs?

    The best plan that I’ve heard of was Scott Heyworth’s plan with ANGDA. The gas-line should have been built along the TAPS right of way. Take off points along the way could have provided natural gas to a large section of Alaskans, including shipping gas in containers up and down the rivers to those communities.

    Put a T in the line at Glennallen, and the gas-line would have run over to Palmer and hooked up the south-central area with enough supply to last for a long time, and prevent any potential disruptions for the foreseeable future.

    If Alaska doesn’t get all the gas it will ever need in an uninterrupted manner first, I’m not in favor of Mead’s wish.

    • Glennallen has hydro electricity.

  • Another kick in the gut to IGU. FNSB will now burden the community with higher property taxes because they just couldn’t let go. Like the Frozen Song-Let It Go, Let It Go…..Wow, and the agenda in FNSB (clean air) is crumbling right before their very eyes. Good job Mead, and I hope my friend is there helping you…..do what you need to do, and hopefully FNSB will pull their heads out of their butts.

  • Free market ideas will always provide better more cost effective solutions than government, this is yet another example.

  • I said some time ago: Take some of our PFD money and build our own gas line and infrastructure, and leave the state out of it as much as we can. Put feeder lines in and have small tanker fleet and sell it to Alaskans at cost. We own a percentage of the gas so we should get it as cheaply as we can.

  • Our President has faced the nations head on with negotiating fair trade practices. Look at how the market is now opening up. Japan (friend of the US,.)is willing to help balance US/ Japan trade deficit by helping to finance a natural gas project on the North Slope! The free market is working again! Great project Now lets get behind Meade and move forward!

  • I’m curious about these stern-first ice breaking tankers. Is this a design already in use somewhere or are these the first? Seems rather dicey considering that if the screw was to be damaged the ships would be dead in the water.

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