LNG, ASAP: Project which would move has from North Slope to Southcentral through Mat-Su, clears Army Corps hurdle

The U.S. Army Corps of Engineers issued a final Environmental Impact Statement Friday, June 22, for a 36-inch 800-mile natural gas pipeline from the North Slope to Southcentral Alaska.

The “Alaska Stand-Alone Pipeline,” or ASAP, is a smaller backup to the large Alaska LNG Project that the Alaska Gasline Development Corp., a state-owned corporation, is also working on.

Frank Richards, AGCD’s vice president for engineering, said regulatory proceedings on both projects are being pursued on parallel tracks, and the effect of the corps’ action on Friday is to speed certain approvals for the larger gas project

ASAP was initiated by the state corporation before work began on the larger Alaska LNG in 2014. At the time the larger project faced major uncertainties – as it still does – but the state Legislature proposed and funded work to prepare a backup plan for a smaller pipeline to get North Slope gas to Fairbanks and Southcentral Alaska, which, at the time, faced its own uncertainties about gas supplies from Cook Inlet.

Since then, the state has pursued federal permits for both projects.

Now having an approved Environmental Impact Statement in-hand, to be followed soon by a federal Record of Decision, AGDC will be able to advance the larger project at a faster pace.

That’s because some of federal approvals for the 36-inch line, particularly the grant of a right-of-way across 233 miles of federal land, also help the larger project, which will follow the same route proposed for the smaller pipeline.

In total, there are three federal authorizations that also to Alaska LNG, the right-of-way as well as a wetlands-impact mitigation plan approved by the Corps of Engineers along with an approved cultural resources agreement with other federal agencies and Native American tribes along the 800-mile pipeline route.

The state of Alaska has already issued a right-of-way across state-owned lands. AGDC can also use those rights-of-way for the larger Alaska LNG pipeline.

Alaska LNG involves a 42-inch, 800-mile pipeline also built from the North Slope and following the same route as proposed for the 36-inch pipeline. through Interior Alaska and to the Matanuska-Susitna Borough. But where the 36-inch ASAP would have terminated in the Mat-Su, the 42-inch Alaska LNG would be built further south across Cook Inlet to the site of a proposed large natural gas liquefaction plant on the Kenai Peninsula.

The two routes diverge in the Mat-Su, with the Alaska LNG pipeline built further west near the Susitna River and the ASAP pipeline built to a terminus near the Mat-Su’s populated communities.

While ASAP’s EIS is now complete, another federal agency, the U.S. Federal Energy Regulatory Commission, is now working on an EIS for the larger project.

AGDC, the state gas corporation, is leading both projects.

“AGDC is advancing two North Slope gas pipeline projects on parallel paths, but only one will be built,” said AGDC Senior Vice President Frank Richards. “We have avoided duplication of work efforts and both projects have benefited from data sharing. The Final SEIS for the ASAP Project sets the stage for AGDC to build a pipeline from the North Slope of Alaska and better positions the Alaska LNG Project for success.”

Richards said AGDC will “leverage” this federal approval in their work with the FERC to advance the Alaska LNG Project expeditiously. “The federal agencies are now intimately familiar with the environmental conditions along the common alignment,” of the pipeline, due to their review of the 36-inch pipeline proposal, Richards said.

The ASAP application, approved in the federal decision Friday, includes a natural gas conditioning plant at Prudhoe Bay, a 733-mile 36-inch pipeline built to Southcentral Alaska, as well as a 30-mile, 12-inch lateral pipeline in Interior Alaska built off the 36-inch pipe to Fairbanks.

If the Alaska LNG Project is built it would also have a gas conditioning plant on the North Slope, but a larger one, as well as the lateral pipeline to Fairbanks.

If the larger project were built it would export up to 20 million tons of LNG yearly mainly to markets in Asia. The smaller ASAP project does not include an LNG plant. It is intended to supply in-state gas power generation and space heating needs as well as in-state manufacturing.

Meanwhile, if the larger LNG export project is delayed or not built, the federal approvals announced Friday will allow the state to move ahead with construction of the smaller project, although that does not include an export capability.

It is conceivable, however, that an LNG export plant could someday be built, most likely in the MatSu, and supplied by the 36-inch pipeline.

On Alaska LNG, the state is now negotiating with three potential customers and investors in China: Sinopec as an LNG purchaser, Bank of China as a financier and China Investment Corp. as an equity investor, with a goal of having agreement on commercial terms later this year.