North Slope Producer Applies for LNG Export Licence

If you think this is good news for the Alaska gas line and LNG project you would be wrong.

The 4 BCF / 30 MTPA LNG project is being developed by WCC LNG, an entity owned by  Exxon Mobil and Imperial Oil Resources. The project will be built in the Kitimat and Prince Rupert area.

• LINK TO APPLICATION DOCUMENTS
• LINK TO APPLICATION

There's talk of an Alaska LNG project announcement soon (no later than 30 Jun 13).  That may just be wishful thinking -The WCC application has all but one of the ingredients needed for an Alaska LNG project, i.e. it's not in Alaska.

The project will be based on Canadian shale gas resources but may ultimately recieve gas from other sources:

The LNG Terminal will access gas primarily from the WCSB. Given the  ntegrated nature of the North American gas markets and pipeline network, gas supply could also potentially come from other Canadian or North American basins over the life of the LNG Terminal.

 So maybe some day an Alaska gas line to Canada may send gas to an export terminal in Canada. By someday I mean decades from now.

This news combined with the Petronas Canada LNG project announcement leads me to believe that Canada will export LNG before North Slope gas is exported.


The cost of the WCC project is not stated and the project is not approved yet.  This non-Alaska Exxon Mobil LNG terminal may become a powerful bargaining chip in negotiations with the State of Alaska.  Alaskans won't like that and I'll bet Exxon Mobil comes out the winner no matter which project goes forward.

The good news for Alaska, is that the Canadian upstream is not as developed as the North Slope upstream which means the unit cost of West Coast Canadian LNG may be within 10% of the cost of North Slope LNG exported from South Central Alaska - that 10% may offer room to negotiate.

Canadian and L48 LNG Project Progress

Pacific Northwest LNG is making progress on their LNG export project planned for Prince Rupert B.C.  From their press release:

 Pacific NorthWest LNG Ltd. has awarded Front-End Engineering and Design (“FEED”) contracts for its proposed liquefied natural gas (“LNG”) facility in British Columbia to three international engineering contractors - Bechtel, KBR/JGC joint venture, and Technip/Samsung Engineering/China Huanqiu joint venture.

The project timeline currently aims for an investment decision in 2014 and project completion in 2018.

Also - Real progress on L48 LNG projects : LINK

Sabine Pass Liquefaction Project ( In Construction) 2.2 BCFD equivalent with room to expand, customers and financing locked in.

Feeeport LNG (clearing permitting hurdles)  2.0 BCFD equivalent, customers signed on, construction planned to start later this year.

Once again Alaska is getting left behind.  Every day and every time I hear about another project announcement I grow a little closer to the "never going to happen" point of view for the Alaskan LNG project.

ConocoPhillips - LNG Makes Sense for Stranded Gas

ConocoPhillips is busy around the world with new LNG projects.  According to this article (LINK) Australia is first in ConocoPhillips mind but they are looking at potential projects in the US and Canada.  Quotes:

ConocoPhillips is studying North America's potential to export natural gas, but it isn't high on its priority list and any rush to build terminals on the U.S. coast could face opposition from Washington, Al Hirshberg, the company's Senior Vice President, Planning and Strategy, said Thursday.

"I just don't see it," Hirshberg said. "Five years from now Queensland will be a major spot on the map, as well as Western Australia in terms of LNG export, and the U.S. Gulf coast won't be, that's my prediction." 

"Canada's a little different," he told Dow Jones Newswires in an interview. "The gas in Canada is stranded, it really doesn't have access to a market so spending the money to liquefy it and get it ready for export is going to make long-term sense."

Similar logic may apply to stranded Alaskan Gas.  Probably not, but exportation of other gas plays helps build price stability which in turn helps the prospects of the Alaska Gas Pipeline.