AGDC to meet with FERC March 22 to discuss LNG Project

Alaska Gasline Development Corp. officials will meet with U.S. Federal Regulatory Commission staff in Washington, D.C. March 22 to clarify the Commission’s request for information on a number of issues on the proposed Alaska LNG Project.

Among those is a reevaluation FERC has requested of Port MacKenzie, in the Matanuska Susitna Borough, as the site of a large natural gas liquefaction plant and terminus of a large-diameter gas pipeline from the North Slope. Nikiski, on the Kenai Peninsula, is currently the proposed site of the LNG plant and pipeline terminus.

Dave Cruz, Chair of AGDC’s Board, said he does not believe the federal regulators derail the proposed Liquid Natural Gas Pipeline.

At an AGDC board meeting last Thursday, March 8, Cruz and other board members addressed questions concerning FERC, a government agency whose responsibilities include reviewing natural gas pipeline construction.

Since last summer, AGDC responded to 801 comments in three FERC data requests. After submitting their answers, FERC replied to AGDC with 288 more comments, 279 Federal agency comments, and requested a face to face meeting. While this is daunting, Cruz stressed his optimism in the project. He said the new pipeline falls under the Fixing America’s Surface Transportation Act or FAST Act.

The FAST Act was an authorization bill signed by President Barrack Obama improving the “timeliness (…) and transparency of the Federal environmental review and authorization process.” The Trump Administration designated the LNG pipeline under the FAST Act. Once AGDC answers all inquiries, FERC issues the final Environmental Impact Statement and a Record of Decision. With this approval, the project will move ahead, “fast with the FAST Act,” said Vice Chair Hugh Short.

The board explained the importance of the FERC questions. The questions asked by FERC are designed to ensure public safety and lessen environmental impacts.

Additionally, FERC’s inquiries are precautions against possible litigation which could come later, affecting pipeline construction. With these legal issues already addressed, development of the project is streamlined and should run into delays from lawsuits. Vice President of Program Management Frank Richards believes ADGC will answer the questions by April. The board expects its final investment decision in the first half of 2019 with construction completed by 2024.

Critics of FERC claim the organization acts as a rubber stamp for pipeline construction according to FERC Chairman Kevin McIntyre. In 2016, the EPA accused FERC of failing to climate change in its pipeline approval process. Increasing clashes with environmental forced FERC to reexamine how it approves pipelines, said McIntyre.

The board also addressed financing as the project moves forward. Currently, the LNG project has a letter of intent from 11 customers, four publicly announced and seven confidential. ADGC expect the project to cost $43.4 billion total with Sinopec and the Bank of China providing 75 percent of the financing in exchange for 75 percent of LNG produced.

China Investment Corporation, the nation’s sovereign wealth fund, may also become an equity investor but Alaska will maintain majority ownership, AGDC has said. For additional equity investment, the company is turning to third parties including Alaskans.

ADGC is seeking a Special Development Program Receipt Authority from the Alaskan Legislature to allow third-party investment. Cruz said a state of Alaska investment is “desired (by the potential China partners) but not required” for construction.

The board discussed the way forward. It sees 2018 as a year devoted to paperwork and public engagement through an “Alaska First” workforce interface with the Department of Labor and Workforce Development. The corporation is also working to increase its interactions with the public by creating videos for social media and will hold community meetings in March and April throughout the state. An online database of interested Alaskans is under development.

Efforts also continue by ADGC to establish training programs with the state for future pipeline workers. While the goal is project completion by 2024, the board believes the pipeline will continue to generate jobs for multiple generations.

The Alaskan LNG Project is a proposed 800-mile, a 42-inch natural gas pipeline from the North Slope to a large gas liquefaction plant in Southern Alaska.

Currently, Nikiski is the planned site of the liquefaction plant. Port McKenzie, in the Matanuska-Susitna Borough, also being reconsidered following a request to FERC by the borough. Valdez is a third possible site being reconsidered, at FERC’s request.

ADGC will meet with FERC officials in Washington D.C. to discuss, “site alternative questions and environmental data,” according to Communications director Jessie Carlstrom. The meeting is planned for Thursday, March 22 and will be available to the public. ADGC does not anticipate any additional field work for the selection of the liquefaction site.

"AGDC is seeking clarification of the scope of the analyses needed to adequately respond to FERC Staff or other agency, as applicable. We do not anticipate any field work for either of these alternative analyses or at the proposed Nikiski liquefaction site, " AGDC spokesman Jessie Carlstrom said.

Construction of t project has received increased interest after China and Alaska signed a Joint Development Agreement last November. AGDC is a development company and is not a natural gas producer. Traditional energy companies like BP, ConocoPhillips and ExxonMobil Corp., who are North Slope producers, will provide gas resources for the proposed project. Additional information on the LNG pipeline and community meetings are available on the company’s website at www.agdc.us.

Don Mateer is an Anchorage-based writer and a journalism student at the University of Alaska Anchorage