Friday, December 5, 2014

Parallel Universe - Canadian LNG Blues

Canadian LNG projects are similar to The Alaska LNG effort with some upstream and climatic differences. (LINK TO LNG-N-BC)

A week ago I would have predicted success for the Petronas led Pacific Northwest LNG project but apparently the project economics are not meeting client expectations (Globe and Mail Link). 

At 19.2 MMTPA, the PNW LNG project has about the same capacity as the Alaska LNG project. Gas is supplied to the PNW project via the Prince Rupert Gas Transmission Project which is 560 miles long (240 miles shorter than the Alaska LNG project).  Unlike Alaska, significant upstream development is required to provide gas to the PNW pipeline.

A final investment decision was due this month.

LINK to Map of BC Gas Pipelines

LINK to BC LNG information (BC Environmental Assessment Office website)

LINK to PNW Data

PETRONAS statement regarding LNG development in British Columbia

Quote: PETRONAS and its partners have decided to defer the project’s $36 billion Final Investment Decision (FID) pending further clarity on substantive items of importance to ensure that critical project components align with economic viability of the Project and competition from other LNG producing countries. Costs associated with the pipeline and LNG facility remain challenging and must be reduced further before a positive FID can be undertaken.

ASAP Update

Supplemental environmental impact statement (SEIS) documents are available HERE.

Summary of design changes (page 15 of the presentation)

Sunday, November 30, 2014

SOA Alaska LNG Project Current Highlights - Presentation

State of Alaska LNG Project Current Highlights - Presentation

Slowww progress - expect some real news by August 2015 (see page 5 Public Release of Agreements)

Sunday, November 23, 2014

DOE Approval, a New Governor, and BBQ

So little tangible progress is being made that I've cut way back on keeping up with this blog, but this week was semi news worthy.

First - DOE approved the Alaska LNG Project LLC 14-96 application to export up to 20 MTPA.  That's a hurdle, not the last hurdle or the biggest hurdle, but good news all the same. (DOE LINK)

Second - Bill Walker won a close race for Governor and unseated Sean Parnell.  For all I know he may be the guy that pushes the project over the next batch of hurdles, however sometimes he scares me and I fear he'll be a deal killer out of the Sarah Palin mold.  But Walker is brighter than Sarah Palin and I think he is truly dedicated to getting the project built.  He may increase the State equity position and that's OK as long as the percentage stays below 50%.  Above that the sparks may fly.

At this point I'm going to stay optimistic and wish Walker all the best luck.

A note of thanks to outgoing Governor Sean Parnell.  He inherited a mess from Sarah Palin, but he cleaned up that mess and got the project back on track, took care of the Point Thomson issues and forged some monumental deals.  Although progress has been slow I don't think Parnell was the problem - he was actually the leader pushing with all he had to get it done.

FYI - every time I type "Bill Walker"  it comes out "Bill Miller" as in Austin Texas BBQ, guess I've been away from Texas too long. so excuse me in advance if I mistype the new Governors name every once in a while - it happens.

Sunday, November 2, 2014

Monthly Pre-Filing Status Report No. 01

The first project progress report to FERC is out (LINK).

Stakeholder engagement, studies, field work, pre-design all "tracking".

It looks and feels like 2005/2006 all over again.  So many hurdles yet to go.

Metrics of success I'm looking for:

1) Announcement of customer commitment to buy product
2) Announcement of customer equity participation in project
3) Ordering pipe.

Thursday, October 2, 2014

Wednesday, September 17, 2014


At long last we're starting to read about Japan's interest in new Alaska LNG.

From the Alaska Dispatch we learn than teams from Alaska are visiting Japan (LINK) and from Nikkei we learn that Japan's Ministry of Economy, Trade and Industry will sign a memorandum or understanding with the Alaska project (LINK).

Why is this important? - You only build bankable projects and the cost of world scale LNG plants require that you must sell your product before you can obtain financing.  For example look at the customer side of a current project like Cheniere (LINK).  The Alaska LNG project must execute sales agreements before the project moves into the detail engineering and construction phase.

Saturday, September 13, 2014

LNG Customer interest?

Good news for Alaska LNG - signs of LNG customer interest (PLATTS LINK)

Tuesday, September 9, 2014


Signs of life for the Alaska LNG Project?

New Files: Request to Commence Pre-Filing Process - Alaska LNG Project by ConocoPhillips, BP, ExxonMobil, etal 

Milestone schedule:

Find more at the FERC ELibrary  website (LINK)

Use the "General Search" option and Docket number PF 14-21

Project Docket : PF14-21-000

Another filing (LNG Export application) is located at

Tuesday, August 26, 2014

TransCanada Out?


Perhaps this is a procedural step needed in order to make way for the new and improved project team.

Tuesday, July 29, 2014

Another BC LNG Project

The list of Alaska sized LNG projects in BC just keeps growing.  Latest contender: Quicksilver Resources, Campbell River, BC (Application LINK

BC LNG projects website (LINK)

Project website (LINK)

Tuesday, July 22, 2014

Monday, July 21, 2014

Department of Energy Filing

From Governor Parnell's website:

July 21, 2014, Anchorage, Alaska – After ensuring that Alaska’s gas could go to Alaskans first, Governor Sean Parnell today lauded Alaska’s LNG Project for applying to export liquefied natural gas (LNG). The application was submitted to the U.S. Department of Energy.

“We are building Alaska’s future with a gasline to heat our homes and fuel Alaska’s businesses,” Governor Parnell said. “Alaska’s LNG Project is on the right track with hundreds of Alaskans out in the field this summer working to secure permits and hundreds more working to refine the engineering and design challenges of the project. I am committed to getting Alaska’s gas to Alaskans and then to markets beyond. I look forward to continued progress on this important project.”

The application requests authorization to export up to 20 million metric tons per year of LNG for a period of 30 years. The application seeks to export to countries that have existing free trade agreements with the U.S. and to non-free trade agreement countries.
Link to Platts (more detail)

Alaska-LNG website press release

Wednesday, July 16, 2014

$70 Billion Gas Line

No, it's not the Alaska Gas Line and LNG Project (thank goodness) - it's the Gazprom Russia to China "Power of Siberia" pipeline. (LINK). The Russian project estimate is now at $70B, surpassing the $65B price tag for the Alaska gas project.

In other news, the quarterly Exxon FERC Alaska Pipeline Project activity report doesn't indicate any activity. (LINK)

Saturday, July 12, 2014

Plan B - Enbridge

News on the Plan B small gas pipeline (LINK)

Canadian LNG Report

In terms of markets, project cost, technology, and risk the proposed Alaskan Gas Pipeline and LNG project has a lot in common with the proposed western British Columbia LNG projects.

Here's a link to a report titled: "RISKY BUSINESS: THE ISSUE OF TIMING, ENTRY AND PERFORMANCE IN THE ASIA-PACIFIC LNG MARKET" M.C. Moore, D. Hackett, L. Noda, J. Winter, R. Karski and M. Pilcher The School of Public Policy

Saturday, July 5, 2014

Canadian LNG Projects

Need a summary of the long list of Canadian LNG Projects?  Me too.  Find it here (LINK)

Projects sized to compete with Alaska LNG (10 MMTPA or greater):

LNG Canada (LINK)  24 MMTPA

Kitimat LNG (LINK)  10MMTPA

Kitsault Energy (LINK)  20 MMTPA

British Gas Group (BG Group) (LINK) 21 MMTPA

Pacific NorthWest LNG (LINK)  18 MMTPA

Aurora LNG (LINK)  24 MMTPA

Canada Stewart Energy Group Ltd (LINK) 30 MMTPA

Interesting mix of projects - about 7 times the volume of the proposed Alaska LNG Project.

Thursday, July 3, 2014

Alaska Gasline Work Underway

That's what the press release says, but I have haven't heard of any contract awards etc,

To put this news in P3 schedule terms "We'll take and actual start on this activity"


Press Release:

July 2, 2014, Juneau, Alaska – Citing significant progress on an Alaska gasline that gets Alaska’s gas to Alaskans and markets beyond, Governor Sean Parnell welcomed news that a formal commercial agreement has been signed between the Alaska Gasline Development Corporation (AGDC), BP, ExxonMobil, ConocoPhillips, and TransCanada to advance the Alaska LNG Project.
“Environmental and pipeline engineering fieldwork has officially begun,” Governor Parnell said. “I am pleased all parties continue to make progress on building an Alaska gasline project that will create thousands of Alaska jobs and fuel Alaska homes and businesses. This milestone marks the historic progress we have made on a gasline. Our way forward will continue to be on Alaska’s terms and in Alaskans’ interests.”
The Alaska LNG Project has fully entered the Pre-Front End Engineering and Design (Pre-FEED) phase – a milestone no previous Alaska gasline project has achieved. During the Pre-FEED phase, the producer parties will spend hundreds of millions of dollars on design and engineering of the project. In the coming weeks, the project will begin to work to secure an export license with the Department of Energy and continue permitting work with the Federal Energy Regulatory Commission. Each producer party, in addition to the state, will begin to engage the LNG sales market during this phase.

Friday, June 27, 2014

Tuesday, June 17, 2014

Somewhere a village is missing an idiot

I'd like to remain professional and objective when confronted with opinions I disagree with....but then there's this guy:

Senator Ed Markey of Massachusetts

Markey thinks LNG exports are against the law (read the madness here)

As twits go I like these guys much better:

Maybe Markey will over play his hand and someday domestic oil can will be exported overseas.  Just imagine - free markets at work without government interference.

 Who's your favorite twit?

Friday, June 13, 2014

AK BC LNG Competition

In the not so far off future LNG may flow from western British Columbia and/or Alaska.  Of course market is increasingly competitive and all proposed projects may not fly. (LINK to Globe and Mail)

Learn more about proposed Canadian LNG projects here (LINK to NEB)

Friday, May 9, 2014

SB - 138 Signed

Alaska Governor Sean Parnell has signed SB-138, the legislation that may enable the Alaska gas pipeline and LNG plant.

Link to Press Release

Monday, April 21, 2014

SB 138 Project approved by State Lawmakers

 SB 138 LINK

Details Link

04/20/14  (H)    PASSED Y36 N4
04/20/14  (S)    CONCUR AM OF (H) Y16 N4

Gov. Sean Parnell press release

Saturday, March 22, 2014

SB 138 Flowchart

Good graphic explaining the SB 138 path forward.


Friday, February 7, 2014

Saturday, January 11, 2014


 Ding Dong AGIA is dead. Any predictions on the degree of State participation?  I'm guessing an eighth or more.  An eighth would equal $7.5 billion which should be a manageable figure for the state.

Why this is Good:

1. AGIA may have worked in a shale gas free world,but it was absolutely doomed after shale gas gathered momentum in the lower 48.

2. State participation gives the project better financing  options and terms.

3.  Alignment - State interest are better served as partners.

4.  Revenue - as an investor the State stands to receive a return on the investment.

5. Agreements are forthcoming - I have to assume the Governor wouldn't make this announcement unless the grand deal was about to signed.

6.  A Flat Gross Tax on gas sounds like fiscal certainty at long last?

What would make this better:

1. LNG Buyer participation - nothing says that won't happen, but LNG customer participation could strengthen the project. 

What could go wrong:

1. Just about anything and everything can go wrong at this stage.  The problem with grand deals is that somebody or group will feel left out or abused by the deal, then the lawsuit phase of the project begins.  I hope the project survives that stage but hang on to your hat.

Good luck Governor, this is a big step in the right direction.

Press Release from Alaska Governor Sean Parnell (LINK), text:

January 10, 2014, Anchorage, Alaska – Governor Sean Parnell today announced that the State of Alaska will pursue becoming an equity partner in the Alaska LNG project. The governor also announced the state will terminate its involvement with TransCanada as its licensee under the Alaska Gasline Inducement Act (AGIA), and partner with the company in a more traditional commercial agreement.

“For the first time in our state’s history, the framework is in place to build an all-Alaska gasline on Alaska’s terms and in Alaskans’ interests,” Governor Parnell said. “We have all the necessary parties to make an Alaska gasline project go - three producers, a pre-eminent pipeline builder, an entity in AGDC that can carry Alaskans’ interests, and state agencies responsible for the royalties and taxes.”
The governor stated he soon expects a commercial agreement, known as a Heads of Agreement, for the Alaska LNG project. The agreement is anticipated to be signed by Exxon, BP, ConocoPhillips, TransCanada, the Alaska Gasline Development Corporation (AGDC), and by the commissioners of the Departments of Revenue and Natural Resources. The Heads of Agreement will be subject to public review by the Legislature.

“As a partner in the gasline project, Alaska will control its own destiny,” Governor Parnell said. “Ownership ensures we either pay ourselves for project services, or negotiate and ensure the lowest possible costs. As a partner, Alaskans stand to gain more.”

Governor Parnell also intends to introduce legislation addressing how the state will manage its gas resources by authorizing the Department of Natural Resources to modify certain leases, and enter into shipping agreements to move and sell the state’s natural gas. The legislation will propose moving from a variable net tax to a flat gross tax for North Slope gas, allow certain leases to pay production taxes with gas, and enable the Departments of Revenue and Natural Resources to manage the state’s gas revenues.

“While most Alaskans have seen past efforts to develop a large gas project falter for various reasons, this time is different,” Governor Parnell added. “AGDC is our ‘ace in the hole,’ meaning we can still opt for the smaller volume ASAP project.”