LNG Project Information

The Alaska LNG project would be among the world’s largest natural gas development projects. And the single largest component — the gas liquefaction plant and marine terminal — would be built in Nikiski, on the Kenai Peninsula.

 

Though a construction decision by the project sponsor is likely a few years away, depending on the development's economic feasibilty and permitting, the Kenai Peninsula Borough is working to understand the project’s potential impacts on residents, services and the local economy. The borough mayor’s office is working with the project sponsor and state and federal regulators to ensure community needs are addressed.

 

The mayor’s office prepares regular updates for posting to this website, sharing information about the project and also global gas markets so that residents can better understand the issues affecting the megaproject — its design and construction planning, permitting and economics.

 

North Slope oil and gas producers ExxonMobil, ConocoPhillips and BP led the project development team 2013-2016, but then individually decided to slow down spending toward permitting, engineering and design as a global oversupply of LNG and weak prices led to unfavorable market conditions for such a large investment. By the end of 2016, the companies collectively had spent more than $500 million on preliminary engineering and design, but were reluctant to spend substantial additional money in the weak market. In late 2016, the state of Alaska, led by the legislatively created Alaska Gasline Development Corp. and encouraged by the governor, took over management of the project in hopes of keeping it on schedule to a mid-2020s in-service date.

 

The state development corporation believes Alaska LNG may be able to succeed in a competitive global marketplace with federal tax breaks, lower-cost loans and a different financial structure than a private-sector managed project.

 

The Alaska LNG development, estimated in 2016 at $45 billion, includes a massive plant on the North Slope to cleanse the gas of carbon dioxide and other impurities; approximately 804 miles of 42-inch-diameter pipeline from Prudhoe Bay to the west side of Cook Inlet and across to Nikiski; and the liquefaction plant, storage tanks and shipping terminal at Nikiski.

 

The pipeline would be built to carry 3 billion to 3.5 billion cubic feet of natural gas per day. Alaskans would use some of this gas, and running the compression stations along the pipeline and operating the LNG plant would consume more of the fuel. 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 Gasline Development Corp. in April 2017 filed an application with the Federal Energy Regulatory Commission to start the environmental impact statement process, which could last at least two years. The corporation hopes for a FERC decision by December 2018, to allow a final investment decision by the state -- and any partners -- in 2019, with construction to start later that year. The state's timeline assumes it is able to sign up customers, investors and financing on long-term contracts to underpin the multibillion-dollar development.

 

Through a comprehensive survey, we sought your input and we listened.

We conducted a comprehensive survey of residents to improve boroughwide services to the public. Thousands participated in the survey by answering our questions and providing valuable comments. Your documented comments and feedback are directly helping guide improvements to road service and the many other roles the borough plays on the Kenai. We will continue to ensure that KPB residents receive quality services that they pay for at the lowest cost possible.

We balanced the budget, cut wasteful spending, and lowered your taxes.

We have placed ourselves in the shoes of the taxpayer. Under the Micciche administration, for the first time in a decade, a balanced boroughwide budget was passed by the assembly. We accomplished this while reducing your mill rate (property taxes). Prior to my administration, the previous two years saw a 16% increase in the KPB budget. The Micciche administration’s overall budget increased by only 2.55%. The general fund budget was also reduced from last year’s and, leading by example, my Mayor’s Department budget decreased as well.

We supported our students – including home school families.

Working with the Kenai Peninsula School District, we are helping to bolster and improve home-school options. Trying to see things through the eyes of home-school parents, students and families helps us be responsive to the 30% of our students who are home-schooled. It is imperative that we understand and meet their needs.

We are ensuring that Emergency Services are efficient and effective.

We are working to make KPB Emergency Services as efficient as possible to better serve the people of the Kenai. Our view and current national practices demonstrate that combined regional services are far more efficient, and effective, and are provided at a lower cost to taxpayers than many smaller service areas. We also procured and distributed life-saving extrication equipment for our emergency responders to help them meet the highway rescue challenges faced in rural areas of the borough.

We updated anti-harassment and anti-bullying policies to protect employees and taxpayers.

We updated and implemented anti-harassment and anti-bullying policies to ensure the safety of KPB employees and protect taxpayers from legal and settlement costs. This includes a confidential reporting system, a mixed-gender review panel, and improved public official bonding requirements to protect the borough from financial liability.

We condemned and removed the Zipmart in Sterling eliminating a serious danger to children and youth.

We responded in record time to condemn and remove the collapsing Zipmart building in Sterling, which had become a serious hazard to children and youth in a location right next to the elementary school and the community center.

We are ensuring that our elections are safe, secure, transparent, and accurate.

We created a limited-in-scope ordinance that will update and clarify borough code regarding KPB elections. These changes will ensure that our elections continue to be safe, secure, transparent and accurate. A few of the improvements this ordinance will make include giving more information to the public about when the canvass board meets, requiring the hand-counting of ballots in at least one randomly selected precinct even in the absence of any discrepancies, creating a clear process for write-in candidates, and adding additional and improved viewing areas for citizen election observers.

We created partnerships with state and federal agencies to effectively meet challenges facing KPB.

We are tackling long-standing issues within the borough in partnership with KPB constituents, local governments and state and federal agencies. These issues include K-Beach and Eastern Peninsula flooding, KPB housing shortages (particularly in the southern and eastern Kenai Peninsula), rural emergency services support, and communication service gaps. We are also mitigating the overregulation of our citizens through common-sense solutions in partnership with those we serve within the KPB.

We have administered over 40 capital improvement projects improving quality of life.

We awarded 44 capital improvement and professional services design contracts, as well as servicing pass-through funding to the private sector and non-profit grant recipients for services ranging from senior citizen programs to community groups. Funded projects include the new Central Emergency Service station, the new Soldotna Elementary School, CPH and SPH hospital projects, Eastway Road drainage improvements, the replacement of siding on Homer Elementary School, and many others.

We improved Solid Waste Management by reducing usable items in our landfills and reopening the “Sterling Mall”.

We made improvements to KPB Solid Waste Management to reduce the enormous cost increases in that department that have occurred in previous years. We have reopened reuse areas, such as the “Sterling Mall” and are evaluating how to further reduce storing marketable materials in perpetuity in our landfills. The team is also evaluating the most efficient methods to reduce and process regulated leachate to reduce costs to taxpayers.

We fought to ensure that critical funding would not be reduced to any of our KPB Senior Citizens Centers.

In accordance with KPB code, senior center funding is redistributed every 10 years after the census is conducted and shows how many seniors currently live in each area of the borough. Many centers had their funding increased through the current formula in the FY24 budget, but several were dramatically reduced. Working with KPB staff, Mayor Micciche created a “hold harmless” solution to fully fund all centers and to ensure that none of our seniors will go without critical services. The “hold harmless” solution passed the assembly unanimously.

We harnessed your expertise to help us be more efficient in providing quality services at the lowest cost.

We have created open lines of communication so that all citizens can participate in our efforts to challenge how the KPB does business through common-sense solutions to long-standing, inefficient practices. Government is known for falling into ruts of inefficiency. By working with you, we are challenging each department to break out of long-standing ruts and take the fast road of maximum efficiency. In other words, we seek to provide quality services at the lowest cost to the taxpayer with an objective to keep the KPB affordable today, tomorrow, and for our kids and grandkids.