Tuesday, August 5, 2014

Fuel Companies Apply for Alaska LNG Project

By Mark Edward Nero

Alaska LNG, a partnership of oil and gas companies ExxonMobil, ConocoPhillips and BP, applied to the US Department of Energy on July 18 for permission to export liquefied natural gas for 30 years from a $45 billion to $65 billion development that includes a pipeline across Alaska and an LNG plant in the Nikiski area.

The 212-page filing seeks permission to export up to 20 million metric tons a year of LNG, the equivalent of about 2.5 billion cubic feet a day of natural gas.

The project would be the largest integrated gas/LNG project of its kind ever designed and constructed, the application states.

The three oil and gas producers are working with the state of Alaska and pipeline company TransCanada to develop the Alaska LNG export project. The development team has started preliminary front-end engineering and design work, with a decision anticipated late next year whether to proceed to full engineering, design and permitting.

In the application, Alaska LNG asks that the export authorization’s 30-year clock start with the date of the LNG plant’s first shipment, or 12 years from the date permission is granted, whichever comes first.

The application asks for two levels of export permission. The first involves exports to any of the 18 countries with which the United States has free-trade agreements covering natural gas. Under federal law, such permission is automatically and quickly given because the trade is considered to be in the national interest.

The second level of permission seeks authority to export to non-free-trade countries, which include such big customers as Japan and China.

Much stricter laws apply to exports to these countries; in such cases, the Energy Department opens a proceeding to consider whether the exports would be in the national interest.