Alaska considers major changes to LNG project

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Low oil prices are causing a re-think on how best to approach the Alaska LNG project. (iStock)
Alaska Governor Bill Walker’s administration is considering major changes to the Alaska LNG project, the effort to build a massive natural gas pipeline from the North Slope.

State officials said today the administration is considering increasing Alaska’s stake in the project — or even taking over ownership completely.

That would be a radical shift from the structure as it’s currently envisioned — and blessed by the Legislature. Right now, Alaska holds a 25 percent stake, sharing ownership with the big three North Slope producers, ExxonMobil, BP and ConocoPhillips.

Outside investors

Keith Meyer started work as president of the state-owned Alaska Gasline Development Corporation last week. In an interview today, he said if the state increases its ownership, it would look for outside investors to fund the project.

“So this is significantly different from the way it was done [to date],” Meyer said. “However, it’s very similar to the way that most of the pipelines in the U.S. have been built, and also the way most of the LNG facilities now have been built.”

Low oil prices

Both Meyer and Marty Rutherford, the acting commissioner of the Department of Natural Resources, said Tuesday that the state is discussing the change because the three oil companies have indicated they may not be ready to move the project forward next year as planned, as low oil prices have cut into their bottom lines. The final project is expected to cost $45 to $65 billion.

But both stressed that nothing has been decided, and the state is still in discussions with its three partners.

The administration is set to deliver its quarterly update on the project to the Legislature on June 29.

This is a developing story, and will be updated. 

Related stories from around the North:

Canada:  Energy challenges in Canada’s North, Eye on the Arctic

China:  Chinese mega-deals in Yamal LNG, The Independent Barents Observer

Norway: OMV finds more oil in Barents Sea, The Independent Barents Observer

Russia: Big interest in new Arctic LNG: Novatek, The Independent Barents Observer

Sweden:  Sweden to have 100 percent renewable energy by 2040, Radio Sweden

United States:  How competitive is Alaska LNG?, Alaska Public Radio Network

 

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Rachel Waldholz, Alaska Public Media

Rachel Waldholz, Alaska Public Media

For more news from Alaska visit Alaska Public Media.

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