A long-awaited Draft Environmental Impact Statement for the big Alaska LNG Project is due on June 28, the board of the state gas corporation leading the project, Alaska Gasline Development Corp., was told June 20.

It’s an important regulatory step for the gas project, but it doesn’t mean there are investors yet willing to put down $43 billion to start construction.

Whether that will happen will depend on future energy prices and whether buyers can be found for up to 20 million tons per year the project, known as Alaska LNG, would ship to export markets.

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If built, this would be one of the largest LNG projects in the world.

Alaska LNG involves a planned 800-mile, 42-inch pipeline built from the North Slope through Interior Alaska to a proposed large liquefied natural gas plant at Nikiski, near Kenai.

Still, the DEIS is an important step. “It reflects five years of work, 150,000 pages of data and 1,738 data requests,” from the staff of the Federal Energy Regulatory Commission asking for more technical information, AGDC president Joe Dubler told the corporation’s board.

Publication of the DEIS will be followed by a required 90-day public review period. Public hearings are planned this summer in Alaska communities.

A Final Environmental Impact Statement is expected in early March followed by a federal Record of Decision in early June, 2020.

That would give the regulators’ okay but finding LNG buyers and investors is still the challenge. Contacts are still being maintained with a group of three large Chinese companies that are interested in purchasing LNG and helping finance the project, AGDC’s board was told June 20.

Meetings with the Chinese were held in early June to provide an update on the project, AGDC’s board was told. AGDC President Joe Dubler and two state commissioners, Corri Feige at natural resources and Bruce Tangeman at revenue, met with the Chinese companies in Beijing. Separately, Dubler and another AGDC official met with prospective buyers in Bangkok and another visit by an AGDC representative went to Ho Chi Minh City.

Sinopec, a major Chinese energy company; Bank of China and China Investment Corp. had signed letters of intent to negotiate with AGDC in late 2018. But that was before the U.S.-China trade war now underway.

Until that is resolved, a big Chinese investment seems unlikely.

An encouraging development, however, is the decision by two major North Slope producers, BP and ExxonMobil, to invest $10 million each to help fund AGDC’s work in completing the EIS process and to acquire the federal license.

This is the first third-party financial participation in Alaska LNG in three years. The two companies, which own large North Slope gas reserves, will put up two-thirds of AGDC’s projected costs of $20 million for state Fiscal Year 2020, the budget year that begins July 1. The state will fund the remaining third.

According to documents presented to AGDC’s board the FY 2020 budget includes $9.7 million in operating funds in the state operating budget, House Bill 39, and $25 million in “receipt authority,” in the state capital budget to allow the state corporation to receive funds from BP and ExxonMobil.

The operating budget is still subject to possible vetoes by Gov. Mike Dunleavy, which are expected by the end of June, and funding for the state capital budget has yet to be finalized by the Legislature.

Alaska LNG is still years away if it happens at all, but it is still important. The pipeline would be built through the Matanuska-Susitna Borough and would make new gas supplies available to Mat-Su communities, although a connection to existing gas pipelines owned by Enstar Natural Gas Co. would be needed.

Similarily, gas would be available to the Fairbanks area In the Interior but through a smaller lateral pipeline built from the route of the 42-inch large pipeline.


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