Just as things seemed to be going reasonably well for the large Alaska LNG Project, the $45 billion to $65 billion gas pipeline and liquefied natural gas initiative in which the state is a partner, Gov. Bill Walker may be throwing a wrench into the works.
State legislators, and the state’s industry partners in the big project, are now worried about the governor’s Feb. 18 announcement that he will pursue a larger version of a small state-backed pipeline intended now to supply gas to Alaskans.
The governor’s proposal is being seen as a possible competing project to the large pipeline and LNG project. That project, Alaska LNG, is now in the preliminary Front-End Engineering and Design, or pre-FEED, phase, with negotiations now underway to advance to the more detailed engineering phase next year and possible construction beginning in 2018.
Walkers’ announcement came out of the blue. Legislative leaders were not informed in advance, nor apparently were state administration officials working on the gas project alongside the industry partners. The governor originally announced his idea Feb. 18 in a press release as he appointed new board members to the Alaska Gasline Development Corp. ADGC is also a partner in the larger joint-project with North Slope producers BP, ConocoPhillips, ExxonMobil and TransCanada Corp.
Industry partners in the project were not pleased about the governor’s announcement. At the time, ExxonMobil spokeswoman Kim Jordan said, “Now that the governor has announced that the State of Alaska is sponsoring a project in direct competition with the Alaska LNG Project, we are assessing the impact on our forward plans.” The company is leading the Alaska LNG Project on behalf of the partners, including the state.
Walker also said he still supports the larger joint-venture gas project but wants the state to have a more viable backup plan ready as an option. “All of the producing companies have other LNG projects they are working on that will be weighed against our project here,” Walker said March 2, citing an ExxonMobil LNG project in British Columbia. “Why can’t we have an option, too?”
Despite his statements supporting the larger project, which have been made many times, many legislators harbor a belief that Walker still prefers a gas project with construction led by the state and the state holding the majority of ownership.
Via Alaska Journal of Commerce
image credit Michael Penn Juneau Empire
