AK LNG Pipeline Conditionally Approved

Tuesday, June 2, 2015 @ 04:06 PM gHale

One of the largest natural gas projects in the world cleared another hurdle last week when the Department of Energy (DoE) OK’d a conditional license that would allow the Alaska LNG project to one day export liquefied natural gas to Asia.

DoE said the approval will allow export of Alaska liquefied natural gas for 30 years to countries that don’t have a free trade agreement with the U.S., so long as the project makes it past a long and complex federal environmental review.

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In November, DoE approved exports to countries that have free-trade agreements with the U.S., such as South Korea.

But the latest decision would allow exports to other Asian countries, including Japan, China, India and Taiwan. That moves the partners in Alaska LNG — ExxonMobil, ConocoPhillips, BP, TransCanada and the state — one step closer to the state’s long-delayed dream of selling its North Slope natural gas to other countries, where demand is high.

Sen. Lisa Murkowski called the approval a “major milestone” that opens up the potential for companies to seek commitments from potential gas buyers in countries such as Japan.

“This is a big deal for us. It allows us to move forward with confidence that this project is real,” said Murkowski, chair of the Senate Energy and Natural Resources Committee.

Deputy Secretary of Energy Elizabeth Sherwood-Randall in Anchorage released the authorization at a forum of top federal officials involved in permitting the project.

The $50 billion Alaska LNG project would move North Slope gas through an 800-mile pipeline and liquefy it in Nikiski for shipment overseas.

First production will not occur for another 10 years.

The conditional approval cannot end up finalized until the Federal Energy Regulatory Commission (FERC) issues a final environmental impact statement for the project, a decision that may happen in another three years.

Energy officials said the Alaska project received separate consideration because of the project’s vast size and the state’s unique economic and geographic conditions, as well as the fact North Slope gas is a “stranded resource.”

FERC has already detailed an early list of concerns it will examine, including impacts on water resources and fisheries, land use, air quality, socioeconomics and endangered and threatened species.

A second round involving more detailed draft resource reports diving into potential impacts will be submitted in February next year, opening up another round of public input.