The new estimates enhances the Alaska LNG Project’s ability to deliver competitively priced LNG

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AGDC will construct and operate the Alaska LNG project in the US. (Credit: Carlos Rivadeneira from Pixabay)

Alaska Gasline Development (AGDC) has reduced the cost estimate for the Alaska LNG Project by 12% of $5.5bn from the previous estimate of $44.2bn.

The Alaska LNG is an integrated project involving development of a 20 million tonnes per annum (MTPA) liquefaction facility at Nikiski, Kenai Peninsula, Alaska, US.

The project also includes the construction of approximately 807-mile-long pipeline capable of transporting up to 3.9 billion cubic feet of gas per day to the liquefaction facilities; a gas treatment plant in the Prudhoe Bay; and two additional natural gas pipelines connecting production units to the gas treatment plant.

AGDC reduces project cost estimates to $38.7bn

AGDC expects the new $38.7bn cost estimate to increase the project’s ability to deliver competitively priced LNG, compared to similar projects to serve major Asian markets.

The latest move follows completion of a rigorous, 14-month process involving third-party natural gas and LNG industry expertise, and representatives from AGDC, BP, ExxonMobil, and Fluor.

AGDC president Frank Richards said: “These updates improve the competitive position of the Alaska LNG Project and its ability to deliver LNG and natural gas at favorable prices.

“We are incorporating these results into our discussions with potential partners as we work to transition to a new market-led project team and maximize project benefits for the State of Alaska. While today’s results strengthen the case for developing this project, it will ultimately be the market that determines the best path forward.”

In May 2020, AGDC has secured conditional approval from the US Federal Energy Regulatory Commission (FERC) for the Alaska LNG project.

The permit allows AGDC to site, construct and operate the Alaska LNG project, which will liquefy and export LNG.

The gas produced by the project will be exported to nations with which the US has signed a Free Trade Agreement (FTA).