To avert Southcentral shortages, Alaska Gasline Development signs initial agreement with Pantheon

20
2079
Photo credit: AGDC

Enough gas for all of Alaska by 2029 and for decades to come? It may be on the way.

As Cook Inlet faces a reduction of natural gas to supply the Railbelt, an agreement has been signed that could get a gasline built from the North Slope to Southcentral Alaska, which would complete one of three major aspects of the Alaska LNG project.

Pantheon Resources, owner of 100% working interest in the Kodiak and Ahpun oil and gas fields on the North Slope, and the Alaska Gasline Development Corporation announced on Tuesday that Pantheon subsidiary Great Bear Pantheon LLC has signed a gas sales precedent agreement with 8 Star Alaska LLC, a subsidiary of AGDC.

The agreement prioritizes the pipeline to Southcentral, and it de-risks the entire project, which involves both a gas treatment plant on the North Slope, and a liquefaction facility at tidewater in Nikiski. The agreement that was signed may de-risk the entire project by getting the pipeline in place first, making the other investments less risky for investors.

Alaska LNG is a federally authorized natural gas and LNG export project under development for years to deliver natural gas within Alaska and export up to 20 million tons per year of liquified natural. But right now the biggest need is for Alaskan homes businesses, and institutions.

AGDC wants the in-state 42-inch pipeline from the North Slope to Southcentral Alaska to avert a looming energy crisis facing the region.

Phase 1 of Alaska LNG does not involve construction of an LNG plant, and as a result has a much lower capital requirement and construction timeframe, allowing gas transportation as early as 2029, said AGDC, which is also in talks with a pipeline developer.

AGDC aims to undertake front-end engineering and design ahead of a final investment decision planned for the middle of 2025.

“This agreement solidifies the commercial foundation needed for the Phase 1 portion of Alaska LNG and provides enough pipeline-ready natural gas, at beneficial consumer rates, to resolve Southcentral Alaska’s looming energy shortage as soon as 2029,” said Frank Richards, AGDC President.

“Phasing Alaska LNG by leading with the construction of the pipeline will make Alaska LNG’s export components more attractive to LNG developers and investors, and this agreement will help unlock the project’s substantial economic, environmental, and energy security benefits for international markets as well as for Alaska. Today’s announcement represents the culmination of the committed work of Pantheon and AGDC leaders and enhances the prospects of Alaska LNG in a way that benefits both the State of Alaska and Pantheon,” he said.

“We are delighted to have the opportunity to create a win-win for the State of Alaska and for Pantheon as we turn the fantastic exploration & appraisal success of the past five years into the development of two giant oil and gas fields on Alaska’s North Slope.  We are building a mutually beneficial long-term relationship with Alaska LNG and with the State which seeks to supply much needed gas required for Southcentral Alaska’s energy needs, while at the same time realising the value from our contingent resources exceeding 1.5 billion barrels of ANS blend and 6 Tcf of natural gas,” said David Hobbs, Pantheon Executive chairman.

“When we set out our strategy to achieve early production and cashflow on the path to financial self-sufficiency, we considered gas monetisation as a path to non-dilutive funding only one of several possibilities,” Hobbs said in a prepared statement. “However, the availability of our pipeline-quality associated gas created the opportunity to bolster the Alaska LNG project, including the pipeline, LNG export facilities and gas conditioning facilities. We are happy to be able to share the benefit, thereby enhancing both Pantheon’s and AGDC’s project economics and funding profiles. Our goal of demonstrating sustainable market recognition of $5-$10 per barrel of 1C/1P marketable liquids by end 2028 remains unchanged.” 

Under the agreement, both parties agree to negotiate in good faith based on the agreed commercial terms. The final agreement will be conditioned on: AGDC and Pantheon making affirmative investment decisions for their respective projects; and required permits and regulatory approvals obtained for receiving gas from Pantheon’s fields into the Alaska LNG Project.

20 COMMENTS

    • Or deb haaland? Also this will be killed in court by the greenies needing environmental impact studies, wildlife migration studies, wild life count studies, some sort of vote and any other number of judicial challenges……. Maybe we some benefit from this in 2059 but probably not.

  1. I had some money in pantheon (PTHRF) but got stopped out. The share price has been trading sideways for the last 9 months or so.

  2. Biden will shut this down. Democrats hate self sufficiency and have their climate change hoaxsters to do the yelling.

  3. The only involvement the State of Alaska should have is to provide reasonable help to secure the right-of-way and permitting. The pipeline should be a common carrier utility with a lifetime agreement that all producers using it will pay the same rate for NG transport to Kenai. The citizens of Alaska should not be stuck subsidizing LNG exports by paying a higher transport cost for in stste use.

    • Right on, this is nothing more that an extension of the millions the State of Alaska has already BLOWN on a pipeline that will NEVER be built until the PRIVATE companies operating in Prudhoe Bay find it to be a profitable venture. Last estimate to install the line was $43 billion. Not even an economical venture, by any stretch. People supporting this BS are either ignorant of the facts or stand to benefit by perpetuating this money pit.

  4. I worked on the proposed Fluor/Northwest gas pipeline back in the 80’s. A lot of money was spent studying the route, which actually was planned thru Canada to the lower 48. I also worked on the early engineering for the Watana dam on the Susitna river. Neither project was ever built. I won’t hold my breath on this latest pipeline.

    • Good for you!! This is Dunleavy’s air-head brain showing his creativity to the public, pretending that he knows what he is doing and hoping no one else will catch on to the hot air he blows. There is no LNG project. Anyone who wants too can check the FERC.gov site to see if any project has requested permitting through an application and has been granted permission by the FERC.gov to proceed following the process. Dunleavy runs around the state giving speeches and hopes no one catches on. He has a few lying, mealy -mouthed, idiot followers that are overpaid and Dunleavy’s next job and trying their best to screw up the state projects as they go. But Dunleavy has Crumb looking for money for Dunleavy’s creative political work. When he is gone from the state, the trail will show then losses in big bucks from the PFD Corp and other Dept’s of the state. Far worse is the loss of resources in fisheries and mining and oil. The loss of small businesses and loss of access are other serious concerns he ignors just sitting on his thumbs speaking with his forked tongue. No one in this state should hold their breath waiting for something done well. because it just won’t happen.

  5. A whole lot of dominoes need to fall before this will ever happen. The associated gas intended to be shipped southward is from the proposed Ahpun oilfield south of Prudhoe Bay, which is a long way from coming into being. This proposal will not ship gas from the existing Prudhoe Bay area fields, just to be clear.

    It’s way too late for any of these pipe dreams to come to fruition. Better start building that LNG import terminal at Kenai and arranging purchases from the the Canadian Kitimat LNG project.

    Is a chill setting in in Southcentral Alaska, or is it just me?

  6. Sorry to point out the obvious, but here goes. There is 19 trillion cubic feet of gas reserves in the Cook Inlet- so says USGS. Why in the world would it be cheaper to build a $20-$40 billion dollar pipeline, with lots of expensive compressor stations which all consume gas from the pipeline, to get gas to SE AK?

    For a fraction of the cost of building a gasline, gas can be produced from the Cook Inlet.

    If the goal is to dramatically raise the cost of energy for Alaskans, this scheme with a uneconomical, costly, pipeline is the way to really screw Alaskans.

    Oh yeah, don’t forget the multi- billion dollars capex for a gas treatment plant on the North Slope- to get the gas to pipeline grade quality.

    • That’s exactly right . Abundance of gas in the CookInlet region . One company controls most of the production .

      Several years ago a company drilling a oil prospect on west side found 2 trillion cubic feet of gas . Enormous gas pressure . No market at the time and plugged and abandoned . At the time there was no place to dispose of the drilling wastes economically . The company wanted $125 per barrel to dispose of the water . The processing facility was with in eye shot of drill site . In lower 48 it costs 50 cents a Barrell to dispose of drilling waste . Definitely an issue to make gas well profitable .

      I am convinced the only reason LNG is trucked to Fbks is to keep home heating oil prices high . Interesting that the folks in South Central are going to start to feel our pain in the interior as their natural gas prices are going to go way up !

  7. Natural gas all over Southcentral Alaska. Coal in and around Cook Inlet and the Valley is constantly producing gas. This is a ploy to price Southcentral Cook Inlet Gas at North Slope delivered to Anchorage price. Natural Gas is dirt cheap worldwide. Natural Gas on the East Cost is $1.40 while North Slope delivered Natural Gas will be closer to $20.

  8. You know the Democrats are going to do everything within their power to shut this down before it ever gets off the ground.

  9. First, only need a pipeline to Fairbanks. Second, we need to open the Cook Inlet fields for supplying South Central. third, we need to stop talking and “get it done”. We have spent too much over the years with all the talking and not enough in doing. Whatever the final cost is, the users will have to fit the bill. The longer this project is put off, the more it will cost. Heat affects Republicans and Democrats in this State, so forget the politics and get it done.

  10. Think for a moment regarding the use of nonrenewable gas delivered in a pipeline. Consider the electricity option where a high voltage direct current line was installed for energy distribution. Such a distribution system could be energized by gas turbine generation on the slope, coal powered generation, hydro, geothermal, wind, nuclear, or another source we may not even know about yet. It’s a lot more efficient to string wire than to lay pipe and it opens up more energy sources. Plus the bush is more likely to benefit from wires than pipe.

  11. They are really placing their bets on Trump winning in 2024.

    Otherwise they wouldn’t be doing this. I hope they don’t expect a fair election…because Trumps voter base will really need to come out 110% if they expect to beat a rigged system…I hope they can pull it off because we can’t survive another year let alone 4 more years of bloodstained Biden…

    Biden and Kamala are not even campaigning…that’s how sure they are of two things.

    1. Their rigged system is unbeatable no matter how many (Americans) Trump supporters there are. (in other words they have AI rigging the system, which is truly unbeatable..)

    Or my biggest fear..

    2. There won’t be an Election.

    Regardless Bloodstain Cornpop & Cackling Kamala are sure confident..by not campaigning.

  12. There is 270 years of gas in Cook Inlet according to a 2011 USGS report, and we can get it with wells in the right spots. How is a gas line more cost-effective?

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