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Three Firms Planning LNG Project Choose Nikiski, Alaska, As Lead Site For The $45-$65 Billion Project

Area Development Online News Desk (10/10/2013)
ExxonMobil, BP, ConocoPhillips and TransCanada selected Nikiski, Alaska, on the state’s Kenai Peninsula, as lead site for the proposed Alaska LNG project’s natural gas liquefaction plant and terminal.

The companies are continuing to refine the agreed project concept that includes a gas treatment plant located on the North Slope, an 800-mile, 42-inch pipeline with up to eight compression stations and at least five off-take points for in-state gas delivery, and a liquefaction plant and terminal. Teams are currently preparing for more detailed engineering and design work, consistent with previously released plan phases.

According to ExxonMobil, more than 20 locations were evaluated based on conditions related to the environment, socioeconomics, cost, and other project and technical issues.

“This is a step forward for the Alaska LNG project and shows continued progress toward building Alaska’s energy future,” said Steve Butt, Senior Project Manager. “The work that we have put into the site selection process gives us confidence that the Nikiski site is the lead location for the LNG plant and terminal. The Nikiski site also results in a pipeline route that provides an access opportunity to North Slope natural gas by the major population centers in Fairbanks, Mat-Su Valley, Anchorage and the Kenai Peninsula.”

A number of engineering, technical, regulatory, fiscal, commercial and permitting issues still need to be resolved as work on the potential $45 to $65 plus billion project progresses. While Nikiski is the lead site, the project team continues to consider other secondary locations, ExxonMobil said. Pipeline routing definition work also continues based on the project summer field work activities, which will be extended south of Livengood.

A competitive, predictable and durable oil and gas fiscal environment will be required for a project of this unprecedented scale, complexity and cost to compete in global energy markets, officials said. The companies remain committed to working with the state to responsibly develop North Slope resources. A successful project could provide a host of economic benefits to Alaskans including state revenues, new job opportunities and access to decades of domestically-produced natural gas for homes and businesses.

“This is real progress toward our administration’s goal of getting a natural gas pipeline to provide lower cost energy for Alaskans,” Gov. Sean Parnell said. “This project is taking shape and the companies’ commitment will help bring Alaska’s gas to Alaskans and markets beyond. This presents a new opportunity for synergy and alignment among the producers and the project being pursued by the Alaska Gasline Development Corporation.”

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