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.