About the Alaska Pipeline Project
Alaska Gas Pipeline Project (2007 – 2010)
Overview: In 2007 the Alaska Legislature passed the Alaska Gasline Inducement Act (“AGIA”). AGIA was intended to encourage the expedited construction of a natural gas pipeline to facilitate commercialization of a natural gas pipeline and to promote exploration and development of North Slope oil and natural gas resources. A more detailed history of this project is available on the FAQ page.
The history of this project can be seen in three phases: (1) Organizational, (2) Alberta project and initial open season, and (3) Project transition and emergence of Southcentral LNG (SCLNG).
Organizational Period: AGIA was passed in 2007. In 2008 a license was awarded to TransCanada to advance a project to commercialize Alaska North Slope natural gas. ExxonMobil entered into an agreement with TransCanada resulting in the formation of the Alaska Pipeline Project (APP).
Alberta Project and Open Season: In January 2010 APP submitted an open season plan for a natural gas project to the Federal Energy Regulatory Commission (FERC) which that agency approved on March 31, 2010. From April 30, 2010 through July 30, 2010 APP conducted its Open Season. Two options were proposed to potential commercial partners both originating from Alaska’s North Slope. Significant commercial interest was shown in a pipeline that would bring Alaska’s natural gas through a pipeline to connect up with existing pipeline infrastructure in Alberta, with the gas ultimately reaching the lower 48 states. This option was selected over an alternative that would have delivered that gas by pipeline to Valdez, Alaska. While significant regulatory progress was made to advance the Alberta Option with FERC, APP was unable to secure a commercial agreement with potential commercial participants, largely due to project economics and advances in shale gas development, which will potentially transform the U.S. into an exporter of LNG.
Project transition and Southcentral LNG (SCLNG): In January 2012 Alaska Governor Sean Parnell called upon the major North Slope Producers to align on a natural gas project under the AGIA framework and to consider an LNG export project to commercialize Alaska North Slope gas and to explore making some of the state’s vast natural gas resource available for in-state use. Since then the major North Slope producers have been working with APP to develop the SCLNG project. Below is a chronology of major events related to that effort:
October 7, 2013: Alaska LNG project selects site in near Nikiski, Alaska (on the Kenai Peninsula) as the lead site for the proposed LNG plant and terminal.
August 23, 2013: SCLNG summer field program concludes.
June – August 2013: SCLNG group and APP engage in summer field work on proposed pipeline route between Prudhoe Bay and Livengood. GPPO staff and small group of Alaska Legislators and staff visit some of the filed program work sites.
June 11, 2013: Project Plan Amendment 1A approved.
February 19, 2013: Steve Butt, Senior Project Manager for SCLNG, provides a project update to the Alaska Legislature.
February 15, 2013: NS Producers & TransCanada send Governor Parnell a letter updating progress on concept selection (fulfilling one of the Governor’s January benchmarks).
January 2013: State of the State – Governor Parnell establishes additional benchmarks. Calls for (1) NS Producers and TC to finalize a detailed project concept selection (including pipeline size and volume, location of GTP & number of compressors, size & scope of LNG storage tanks and number of off take points for instate use); (2) producers to finalize an agreement to enter into Pre-FEED by the Spring of 2013; and (3) ensure a full summer field season in the summer of 2013.
December 3, 2012: The U.S. Department of Energy, Energy Information Office released a comprehensive study evaluating the macroeconomic impact of LNG exports prepared by NERA Economic Consulting. As reported in Reuters on December 5, 2012, this report “offered a strong endorsement for expanding liquefied natural gas exports” asserting that “shipping the nation’s surplus gas abroad would clearly help the overall economy even though it will cause domestic energy prices to rise.”
October 3, 2012: the ANS Producers and TransCanada announced that they had made significant progress in developing the parameters around an Alaska LNG export project. In the producer letter they diagram the SCLNG integrated team, provide an initial project concept description, and provide a comprehensive diagram outlining the work plans and key decision points for the SCLNG Project.
September 2012: TransCanada announced the results of a recently completed market solicitation to identify interest from potential shippers in a major natural gas pipeline project. TransCanada is required under its license with the State of Alaska to conduct non-binding solicitations of interest every two years. Though the results of the solicitation are confidential, a representative of TransCanada reported that the company had received interest from potential shippers and “major players from a broad range of industry sectors and geographic locations,” including North America and Asia.
May 2, 2012: Natural Resource and Revenue Commissioners approve Project Plan Amendment 1.
March 30, 2012: The CEOs for the ANS Producers jointly signed and submitted a letter to the Governor announcing their companies’ alignment, under AGIA, to explore an LNG project to tidewater.
March 29, 2012: The State of Alaska settled its litigation with ExxonMobil and the ANS Producers over Point Thomson.
March 15, 2012: TC submits Project Plan Amendment 1 (PPA1) to seek state approve to amend the AGIA project to focus on LNG.
January 2012: In his State of the State address Governor Parnell announced a roadmap for progressing an LNG project to monetize ANS natural gas. That roadmap identified five benchmarks:
- Resolution of the Point Thomson litigation,
- ANS Producers align under an Alaska Gasline Inducement Act framework and work on a large-diameter liquefied natural gas line through Alaska to tidewater,
- Discuss potential to consolidate two state-funded projects, one advancing a large-scale natural gas project under the Alaska Gasline Inducement Act (AGIA), and a smaller-scale, in state gas pipeline project, under the Alaska Gasline Development Corporation (AGDC),
- ANS Producers and APP to harden their numbers on an Alaska liquefied natural gas project that will identify a pipeline project with an associated work schedule, and
- Providing the first benchmarks are met, that the 2013 Legislature can take up gas tax legislation designed to move the project forward.