Sunday, October 28, 2012

This Week In Alaska Gas

Items of note from the past week:

Fiscal Certainty: Alaska Senator Lisa Murkowski met with North Slope producers (LINK1) (LINK2).Quotes from Oil & Gas Journal:

Alaska North Slope producers say the biggest hurdle facing construction of a natural gas pipeline across the state to a planned liquefaction and export facility on its southern coast is the state’s uncertain fiscal regime, US Sen. Lisa Murkowski (R-Alas.) said following meetings in Houston with the three largest ANS producers. 
“Alaskans have waited 4 decades to see some benefit from their [ANS] gas,” Murkowski observed. “While Lower 48 markets may be oversupplied because of the shale boom, places like Japan and South Korea are willing to pay a premium for long-term supply contracts. But that window of opportunity will not remain open indefinitely.”
Good job Lisa.  I remember Ted Stevens attempted to make the same point when he said:
The right climate for this investment in our State must exist. Originally considered a $20 billion project, recent financial analysts’ comments indicate the cost will be $40 billion. No entity will commit that kind of money – whether $20 or $40 billion – without certainty in the financial aspects of the project’s economics.
 Good luck getting the point across now that the price tag is about 50% more.

Stand Alone Pipeline (ASAP) News: The Final Environmental  Impact Statement on Alaska Stand Alone Gas Pipeline (ASAP) Released (LINK1) (LINK2).  Somehow the economic principles of economy of scale won't work for a big pipeline, but somehow we can build a much smaller one?  Where's the "alignment". In about 2 years ASAP will hit the fiscal certainty wall too.

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