By JANET WEISS
Alaska’s North Slope natural gas is a sought-after resource for our state and for the world. Here in Alaska, our gas can reliably and affordably meet the energy needs of the Railbelt and help move the Interior off of heating sources like wood and fuel oil with high particulate emissions that caused the American Lung Association to label Fairbanks the “most polluted city in the nation.” In Asia, Alaska’s gas can help markets meet rapidly growing energy demand while moving away from coal. Alaska’s large North Slope gas supply can play an important role in global energy.
Internationally, markets, including Japan, Taiwan, Korea, Thailand, India and more, are all negotiating hard for access to LNG from Alaska. Long-term LNG agreements take time, and Glenfarne has only been in the driver’s seat for Alaska LNG for about six weeks. Shortly, Glenfarne will commence the final engineering work needed to produce definitive cost estimates, likely to increase Alaska LNG’s commercial tempo.
While project opponents dismiss preliminary agreements, they are a necessary step towards binding commitments. LNG contracts last for 20 or 30 years and much like buying a house, buying LNG is a multi-step process. In real estate, you have to find a listing, make an offer, perform inspections, and arrange financing, all before you go to closing. LNG buyers need non-binding agreements like a letter of intent or memorandum of understanding before reaching final deals.
Alaska LNG will produce 20 million tonnes of LNG a year. Taiwan interests have already signed a preliminary agreement for 6 tonnes and Thailand’s Permanent Secretary for the Ministry of Energy just directed state energy companies to negotiate up to 5 million tonnes from Alaska LNG. These two agreements, plus two agreements previously in hand, mean that about 65% of Alaska LNG’s export volume now has identified customers.
It is important to note what changed with Alaska LNG to spark so much interest. In addition to bringing in Glenfarne to lead the project forward, the Alaska Gasline Development Corporation (AGDC) developed the option to phase construction of the project to tackle the Cook Inlet gas supply shortage. AGDC, which provides oversight of Alaska LNG for the State of Alaska, determined that Alaska LNG’s overall size and complexity was an impediment to development. AGDC broke Alaska LNG into two phases. Phase 1 prioritizes the pipeline infrastructure to bring gas down from the North Slope to Interior and Southcentral Alaskans. Phase 2 is the export infrastructure.
Focusing on the pipeline first provides long-term energy security for Alaska’s largest population centers. Without Alaska LNG, we’ll need to commit to long-term imports, which will double our energy bills and shred budgets for our families, our schools, and our government. Renewables can help address the problem and help diversify Alaska’s energy sources, but the large gas resources from the North Slope bring reliability and affordability. Imagine gas prices less than half what we pay today for decades to come.
The benefits of phasing the project were also quickly obvious to the LNG market because of the increased likelihood of success, helping accelerate talks with Glenfarne, and intensifying interest among Asian buyers.
Add to that the strong support of our federal government. President Biden gave Alaska LNG an environmental green light and signed into law more than $30 billion in federal loan guarantees, thanks to our Alaska Congressional Delegation. President Trump, who authorized Alaska LNG in his first term, has recognized the geostrategic importance of Alaska LNG across the Pacific and made this project a national priority. This support is incredibly helpful in commercial discussions with potential buyers.
I’ve watched Alaska LNG progress forward since it started just over a decade ago. My husband and I moved to Alaska in 1986 to work for Arco, and I became president of BP Alaska on February 15, 2013. I remember it very well because one of the first things I did that day was to sign an agreement with the State of Alaska and the other owners of Prudhoe Bay and Point Thomson to advance the concept that became Alaska LNG. Today, I am incredibly proud to serve as the vice chair of the AGDC board of directors. I’ve been involved with Alaska LNG for 12 years from two different front-row seats, and there has never been more momentum behind this project than we have today.
Janet Weiss, former president of BP Alaska and vice chair of the board of directors for the Alaska Gasline Development Corp.
