Alaska LNG Pipeline (AKLNG)

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Alaska LNG Pipeline (AKLNG), also known as Alaska Nikiski LNG Project Pipeline, is a proposed fossil gas pipeline.

Location

The pipeline will run from Prudhoe Bay, Alaska, to Nikiski, Alaska.

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Project details

• Owner: Alaska Gasline Development Corp (AGDC)
• Parent company: Alaska Gasline Development Corp (AGDC)
• Capacity: 3,500-3,900 million cubic feet per day
• Length: 805-807 mi
• Diameter: 42 inches
• Cost: US$10.7 billion (cost of Alaska LNG pipeline)
  • LNG project: US$38.7 - US$44 billion (for entire LNG project)
• Status: Proposed
• Start year: 2029
  • Originally 2025
• Associated Infrastructure: Alaska LNG Terminal, Point Thomson Unit Gas Transmission Pipeline

History

The pipeline project began as a joint-venture between North Slope producers Exxon Mobil, BP Alaska, ConocoPhillips, and state-owned Alaska Gasline Development Corp. (AGDC). However, by late 2016, AGDC was the only company remaining in the development of the pipeline project. The LNG project was projected to cost $45-$65 billion and was seen as a crucial method to increase the state's revenue after years of slowing crude oil production. The project had been originally conceived in 2013-2014 when crude oil was $115 a barrel, with demand soaring in Asia concurrently. The three oil companies dismissed the project's viability due to the continuing trend of low energy prices and the enormous capital necessary to realize the project, causing the producers to leave the project.

Despite the major setback for the pipeline project, AGDC has planned to continue with the project. Governor Walker of Alaska met with representatives of a number of Asian countries such as Singapore, Japan, South Korea, and China in order to create support and legitimacy for the project. The project has been in a state of transition since the end of 2016 and has continued to face scrutiny of its viability by the Alaskan State legislature. Ultimately the project could be derailed if new investors are not found in the near future.

In July 2019, AGDC Interim President Joe Dubler told the Anchorage Daily News that the company was in the permitting process for AKLNG. This announcement came with the news that AGDC was reducing "employee headcount by twelve."

The Federal Energy Regulatory Commission released a draft version of the AKLNG environmental impact statement (EIS) on June 28, 2019 with the expectation of a final EIS in March 2020.

Background

If the Alaska LNG project materializes, it would be among the world’s largest natural gas development projects. The project will consist of a gas treatment plant at Prudhoe Bay, an approximately 800-mile, 42-inch-diameter pipeline to Southcentral Alaska with up to five offtakes for in-state use, a 32-inch-diameter transmission line from Point Thomson, and a natural gas liquefaction plant in Nikiski to produce liquefied natural gas (LNG) for export. The Alaska LNG Terminal in Nikiski will be the largest component of the mega-project. The pipeline is planned to be built to carry 3 billion to 3.5 billion cubic feet of natural gas per day. The liquefaction plant would have the capacity to make up to 20 million metric tons a year of LNG (about 2.5 billion cubic feet a day of gas).

The Alaska LNG pipeline will be approximately 800 miles long and since 2017, its development is being led by the Alaskan state-owned company AGDC. Initially, the AGDC projected that the pipeline construction would begin in 2019, with permitting being finish by the end of 2018. Currently, however, the AGDC is still in the process of acquiring 600 acres of land which were purchased by the three oil producing companies that left the project in 2016. The project requires approximately 800 to 900 acres of land. The land presently belongs to a subsidiary company—Alaska LNG, LLC—which ConocoPhillips, BP, and ExxonMobil had created to own the project’s land, website, and Department of Energy export license. The ease and speed of the land purchase will may determine the state legislature and other investors to continue with the project.

In April 2017, the AGDC filed its Natural Gas Act Section 3 permit application with FERC for for the Alaska LNG Project, furthering its progress to capitalize on the the North Slope gas reserves. At the time, the Federal Energy Regulatory Commission was expected to soon publish a schedule for the National Environmental Protection Act review for the project in the Federal Register. The schedule would outline the timeline for a draft environmental impact statement (EIS), expected to be about 12 months, and a final EIS, expected about six months later. AGDC also filed permit applications with four additional federal agencies: the Pipeline and Hazardous Materials Safety Administration, Army Corps of Engineers, Bureau of Land Management, and National Marine Fisheries Service.

As of July 2019, a final environmental impact statement was expected in March of 2020. The draft of the project's environmental impact statement was published in June 2019.

After the pipeline proposal was left out of the Biden administration's infrastructure plan in April 2021, and hence seemingly frozen out from receiving federal funding support, Alaska Gasline Development Corporation president Frank Richards claimed in May 2021 that he was in talks with private companies interested in taking over parts of the project. Richards said, without revealing the names of the companies, that the goal was to announce private partners later in 2021.

As of April 2021, the U.S. Energy Information Administration (EIA) still listed the project as "Applied" for FERC approval, with expectations to begin service in 2025.

In January 2023, the U.S Department of Energy published the Final Supplemental Environmental Impact Statement for the Alaska LNG project.

EIA data from March 2023 showed that the pipeline had applied for FERC approval.

Separately in April 2023, the Biden administration approved LNG exports from Alaska, making the Alaska LNG Pipeline and associated Alaska LNG Terminal ostensibly more likely to be developed.

In May 2023, FERC approved the project, including the terminal and associated pipeline, denying environmental groups' petition to review the project. However, as of April 2024, the U.S. Energy Information Administration still lists the project as "Applied" for FERC approval.

In September 2023, the online media outlet Alaska Public Media reported that although "prominent Alaska politicians remain optimistic" about the Alaska LNG project, there seems to be "general ambivalence about the project among Japanese and Korean buyers," who are the ultimate target market for the project's LNG exports. The same source also mentioned that "there seems to be an information divide between Asia and Alaska about how serious the interest in the project is." Some of the concerns surrounding ambivalence about the project are the pushback it has gotten from environmental groups, as well as the fact that the project "has been going on for a long time, and it just hasn't had much progress."

Proposal of phased approach to supply Cook Inlet region

In February 2024, Alaska Beacon published an online article explaining that Alaska Gasline Development Corporation was "proposing a phased approach to supply the Cook Inlet region with natural gas as a prelude to LNG exports to Asia." Due to the delays in the development of the LNG project, the company would now be "phasing it to be able to move forward with a pipeline first, to be able to utilize North Slope gas resources through a pipeline to be able to deliver them to Southcentral Alaska." According to the new plan, construction of the LNG pipeline would begin in 2025 and gas deliveries would start in 2029. The first phase of the plan, Phase 1, would only run the 800-mile pipeline to ship gas from the North Slope to the Kenai Peninsula, leaving the construction of the liquefaction plant for a later phase. The cost for the first phase would be around US$10.7 billion, "about a quarter of the estimated $44 billion cost of the full LNG project."

In June 2024, Pantheon Resources and the Alaska Gasline Development Corporation "signed a gas sales precedent agreement" that would advance the construction of an in-state pipeline and supply energy to the Anchorage area: "The agreement is primarily focused on Phase 1 of Alaska LNG, yet it also creates opportunities for Pantheon to benefit when the full gasline, including export capability, is completed."

Pipeline route alternatives

The City of Valdez was the only municipality to file a motion to intervene. The city of Valdez believes that it is the best location for the pipeline's terminus, rather than the proposed location of Nikiski. The city has claimed that it is a lower-risk and lower-cost option that than the current route, while it also stated that the Valdez route would be less environmentally harmful. However, while route alternatives will be looked at in the FERC proceedings, the AGDC prefers the Nikiski site, as did the North Slope producers who originally chose the Nikiski site before leaving the project.

Opposition

In May 2017, the Sierra Club and Center for Biological Diversity each filed their own motions to intervene in the FERC proceeding, stating that environmental objections against the pipeline, compressor stations, and LNG terminal. The concerns regard increased air pollution, greenhouse gas emissions, risk to wildlife, and disruption to the habitat of fish. The Center for Biological Diversity stated that the Alaska LNG proposal could increase the frequency and occurrence of damaging exploration methods, and threaten local wildlife, including polar bears and whales. The organization also claimed that the LNG project could also lead the way for more intensive hydraulic fracking and drilling the Arctic. Of the nine groups to intervene, two were negative (The Sierra Club and the Center for Biological Diversity) and 7 were positive.

The Sierra Club and the Center for Biological Diversity have been involved in several opposition actions against the project since 2017. In 2023, both groups sued the federal government for approving exports from the Alaska LNG Project: "The Sierra Club and Center for Biological Diversity are asking the D.C. Circuit Court of Appeals to direct DOE to reconsider its export approval after preparing a new environmental impact statement that fully considers the environmental and climate harms of the project."