www.AlaskaAlliance.com 31 LNG to Southcentral Alaska. “Glenfarne and ENSTAR Natural Gas Company have entered into an exclusive agreement to advance an LNG import project utilizing the Alaska LNG export site,” Glenfarne said in its statement. Speaking in early January at a news conference announcing the negotiations, Gov. Mike Dunleavy said he has previously been skeptical about the gas line but now believes actual progress is being made. “A large gas line has been challenged for decades — the cost, the size, the engineering, you name it,” Dunleavy said. “But there has been significant movement in a positive direction, not just theoretical, but actual, significant movement.” Dunleavy said the pipeline is a long-term solution for a looming energy crunch in Southcentral Alaska, and that the region will face a “bumpy” few years in the meantime. In 2023, state legislators were warned that Southcentral Alaska may run short of available natural gas by the end of the decade. Though the region has extensive natural gas deposits, development has been slow, and local utilities are considering plans to import gas, an act that would sharply increase heating and electricity prices for Alaskans in the region. Dunleavy said he intends to introduce legislation this year that will incentivize gas production in Cook Inlet. The state Legislature approved incentives during an almost identical gas-shortage crisis a decade ago, but lawmakers later repealed those incentives because of their billion-dollar cost. At the news conference, Dunleavy noted that because Alaska is so large, one energy source alone will not be sufficient to meet the state’s needs. Hydroelectric, geothermal, wind, solar, coal and nuclear power are all options for the state, he said. “Alaska has all of it, but we have got to agree that we’re done talking about the theoretical and now we have to make sure that we put things into reality,” Dunleavy said. ENSTAR and other utilities are currently facing shortages of natural gas because of declining gas production in Cook Inlet fields. Importing LNG is seen as a temporary “bridge” for supply until a North Slope gas pipeline can be built. In a related development, the Alaska Industrial Development and Export Authority (AIDEA), Alaska’s development finance agency, announced it will backstop a $50 million financing plan for Front End Engineering and Design, (FEED), for the Alaska LNG Project, which includes a 42-inch gas pipeline from the North Slope to southcentral Alaska, a large gas liquefaction plant and LNG shipping facilities at Nikiski, on the Kenai Peninsula. The FEED will include an update of earlier cost estimates, which includes a $600 million preliminary Front End Engineering and Design, or pre-FEED, done in 2016 and led by ExxonMobil as part of an industry group that included the state’s AGDC. AGDC took the project over in 2016 and has since done updates of the pre-FEED estimate. Under the recent AIDEA agreement, the private developer, now identified as Glenfarne, would fund $50 million for the final FEED with a guarantee of repayment by AIDEA if the project does not move forward. The 800-mile, 42-inch pipeline from the North Slope to Southcentral Alaska could serve Alaska communities along the pipeline route, such as Fairbanks, and also provide energy for mining developments in the Interior and Northwest Alaska. The pipeline also could serve Southcentral Alaska communities that depend on natural gas used for heating and power generation. The full Alaska LNG Project is designed to export 20 million tons of LNG yearly based on about 3 billion cubic feet per day of gas moving through the pipeline. About 500 million cubic feet per day would be reserved for communities in the Interior and southcentral Alaska as well as for industrial projects. The initial gas supply could come from U.K.-based Pantheon Resources, which has found gas as well as oil in discoveries in the central North Slope south of Prudhoe Bay. Eventually the major gas owners on the slope including ExxonMobil, ConocoPhillips and Hilcorp Energy, as well as the state of Alaska with its royalty gas, would ultimately supply the bulk of the 3 billion cubic feet/day needed. “The State of Alaska is facing a looming energy crisis and Alaska LNG represents the best long-term energy solution for our state,” AGDC President Frank Richards said. “The Alaska LNG pipeline will deliver reliable, affordable, low-emissions energy and uniquely provide billions of dollars in economic benefits for Alaskans. Building the Alaska LNG pipeline also strategically positions Alaska to increase the energy security of Pacific allies by derisking construction of the other Alaska LNG components that will generate and commercially export LNG, he said. — Tim Bradner and James Brooks, Alaska Beacon “The State of Alaska is facing a looming energy crisis and Alaska LNG represents the best long-term energy solution for our state. “The Alaska LNG pipeline will deliver reliable, affordable, low-emissions energy and uniquely provide billions of dollars in economic benefits for Alaskans.” — Frank Richards, head of the Alaska Gasline Development Corp.
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