Alaska LNG's FERC application: next steps for the AGDC project.

• Author: Strieker, Julie
• Position: OIL & GAS

After decades of talk but no real progress to commercialize abundant natural gas deposits on Alaska's North Slope, the state has decided to take matters into its own hands, but it won't be cheap.

Various entities, including the oil companies who would supply the gas, have formally pursued the project over the years. In late 2015, the state bought out its contract with TransCanada for $64 million. In 2016, after the North Slope gas producers Exxon Mobil Corporation, BP, and ConocoPhiliips expressed reservations about the commercial feasibility of the project and sought to slow the project, the state, through the Alaska Gasoline Development Corporation (AGDC), moved to take the lead. It is negotiating with the producers while looking for buyers, tax, and funding options for the project, estimated to cost a minimum of $45 billion.

Mountain of Paperwork

In the meantime, long before the first shovelful of dirt is moved, the state has a mountain of paperwork to move.

The producers, in conjunction with AGDC, have already spent an estimated $600 million on pre-frontend engineering design and draft environmental and socioeconomic resource reports.

Those reports are part of the Federal Energy Regulatory Commission (FERC) pre-filing process. As part of the process, FERC has sent the state and the producers a detailed list of questions on those dozen reports so the agency can gather the information it needs to approve Alaska's LNG (liquefied natural gas) export project.

The Alaska LNG Project itself is huge. It includes a gas treatment plant on the North Slope, as well as transmission lines from the gas deposits at Prudhoe Bay and Point Thomson to the plant; a large-diameter, eight-hundred-mile-long pipeline from the North Slope to the Kenai Peninsula with at least five points for local communities to access the LNG; up to eight compression stations; and a liquefaction facility near Nikiski to super chill the gas into a liquid so it can be loaded onto tankers and shipped to as-yet unnamed markets in Asia. Estimates put it between $45 billion and $65 billion. It is designed to export up to 20 million metric tons of LNG annually by 2025.

A Stack of Questions

Many questions remain about the cost to the project, but before that is even estimated, AGDC is facing a stack of questions FERC has compiled from federal agencies reviewing the project, according to Larry Persily, oil and gas advisor to the Kenai Peninsula Borough.

How big of a stack?

In October...