AGDC will stick with Nikiski as prefered choice for LNG Project

Alaska LNG has cited all of its reasons why Port MacKenzie won’t work as a site for a large liquefied natural gas plant.

In a filing with the U.S. Energy Regulatory Commission, the state gas corporation, Alaska Gasline Development Corp., said issues with navigation, tides, beluga whales and other problems make the MatSu port on Knik Arm an unworkable choice for a marine loading terminal for the large LNG plant that is planned.

Because of that, AGDC will stick with Nikiski, on the Kenai Peninsula, as its preferred choice for a plant and terminus of an 800-mile, 42-inch gas pipeline from the North Slope.

There are some advantages of MatSu, such as a pipeline that is 50 miles shorter than Nikiski, but the disadvantages of the Port MacKenzie location appear to override these, the filing indicated.

MatSu had been somewhat overlooked in the initial screenings of port sites by the Alaska LNG Project, the MatSu Borough has argued. In a series of reports filed with FERC the project identified “Point MacKenzie” as unsuitable, mistaking it for Port MacKenzie, which is five miles away.

The borough asked for a reconsideration, which FERC ordered the state gas corporation to do. The recent filing to FERC was the result, with the decision favoring Nikiski unchanged.

One issue highlighted in AGDC’s analysis is the increased distance LNG tankers would travel up Cook Inlet to Knik Arm compared with Nikiski, or 146 miles compared with 88 miles. During non-heavy ice conditions this would add three hours to the trip, or nine hours up the Inlet compared with six hours to Nikiski.

Because of the increased distance and time 12 additional vessel transits in Cook Inlet would be needed to meet the export volume of 20 million tons per year.

There would also be complications with higher tidal currents in the upper parts of the inlet, which would require extra measures to hold ships in safe positions at a loading terminal.

“At the entrance to Cook Inlet tidal currents have an estimated velocity of 2 to 3 knots and in general increase up the Inlet, with large velocities in the vicinities of Harriet Point and East and West Foreland and the entrances to Knik and Turnagain Arms,” the analysis said.

At times vessels can encounter several directions of tidal currents with the velocities increasing the further north a vessel travels. “It is estimated that one or two additional tugs will be needed for safe operations, compared with the Nikiski location,” the analysis said, although it was also acknowledged that tugs will be available from the nearby Port of Anchorage.

Captain Ron Ward, vice president of the Cook Inlet Harbor Safety Committee, put it this way in the report:

There are, “concerns about being able to keep large vessels alongside at Port MacKenzie as tidal currents of six knots can be experienced on spring sides. Vessels can dock, but there is no guarantee that the vessels would be able to load (with LNG) uninterrupted.”

Geoff Merrell, with the state Department of Environmental Conservation, said, “There are (also) concerns about the potential for a large (LNG) carrier to become stranded, or trapped, within the Anchorage basin in the event of being required to vacate (or move off) a berth, or in a missed approach if Knik Arm Shoal is not adequately dredged.”

However, the additional transit time would also result in two pilots being needed for a transit to Port MacKenzie rather than one pilot for a trip to Nikiski, because marine pilots have 8-hour shift limits. As with the additional tugs, this would add costs.

Additional dredging would also be needed for ships to cross the Knik Arm shoal. The shoal now allows room for one-way transit by large vessels but safety requirements would require a channel, now about 1,000 feet wide, to be expanded to 2,000 feet for enough room for two ships to pass.

The analysis also said that much of the present infrastructure at Port MacKenzie would have to be demolished, including the loading trestle and the barge dock in addition to railroad bulk commodity facilities onshore, because they would not be suitable for a large LNG terminal.