DOE authorizes Alaska LNG to export from its planned facility on the Kenai Peninsula

The U.S. Department of Energy on May 28 issued a conditional authorization for Alaska LNG Project LLC to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States.

Subject to environmental review and final regulatory approval, Alaska LNG, in the Nikiski Area of the Kenai Peninsula, Alaska, is now authorized to export LNG up to the equivalent of 2.55 billion standard cubic feet per day (Bcf/d) of natural gas for a period of 30 years.

Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs DOE to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

DOE said that it considered the Alaska application separately from other currently pending LNG export applications in the lower-48 states due to the relative geographic isolation of the natural gas resources on Alaska’s North Slope. North Slope gas has been a stranded resource unavailable to commercial markets. The project proposed by Alaska LNG includes a pipeline intended to make North Slope gas accessible to consumers.

In July 2014, Alaska LNG Project filed an application with the Office of Fossil Energy of the Department of Energy (DOE/FE) under section 3 of the Natural Gas Act (NGA) for long-term, multi-contract authorization to export natural gas as LNG produced from Alaskan sources. Alaska LNG requested authorization to export about 20 million metric tons per annum (mtpa) of LNG, a volume equivalent to approximately 929 billion cubic feet per year (Bcf/yr) of natural gas (2.55 Bcf per day (Bcf/d)), for a 30-year period commencing on the earlier of the date of first export or twelve years from the date the requested authorization is granted.

The exports would originate from a liquefaction facility and export terminal to be located in the Nikiski Area of the Kenai Peninsula. Alaska LNG proposes to build a liquefaction facility and a pipeline connecting this facility to significant natural gas reserves controlled by Alaska LNG’s constituent partners on the North Slope of Alaska.

Alaska LNG’s current members are ExxonMobil Alaska LNG LLC, ConocoPhillips Alaska LNG Co. and BP Alaska LNG LLC. Affiliates of these members currently hold oil and gas leasehold interests in Alaska, including in the Prudhoe Bay and Point Thomson Units.

This project will include four main components:

  • a Liquefaction Facility consisting of three LNG trains with a total maximum capacity of 20 mtpa, with storage and LNG delivery facilities for the marine loading of LNG;
  • an approximately 800-mile long, large-diameter gas pipeline from the liquefaction facility to the gas treatment plant, which will have multiple compressor stations and at least five off-take points for delivery of gas to Alaska;
  • a gas treatment plant on the North Slope of Alaska consisting of three or more amine processing/treating train modules with compression, dehydration, and chilling, to be built in a modular fashion and sealifted to its location; and
  • transmission lines between the gas treatment plant and producing fields on the North Slope.

DOE noted about support for the project: “Carl Portman, Deputy Director of the Resource Development Council (RDC), submitted a letter on behalf of the RDC, stating the importance of the Alaska LNG Project to the Alaska economy and supporting the Applicant’s request for a 30-year term of authorization and a 12-year window before operations must commence, due to the unique challenges the Applicant will face in bringing a project of such magnitude to fruition. America’s Natural Gas Alliance (ANGA) submitted a letter supporting the Application and contending that America’s abundant and affordable natural gas supply will be able to support significant demand growth and that LNG exports from the United States would create a number of economic, geopolitical, and environmental benefits.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.