Resource Development Presentations

No real news to report (again). No evidence of a sense of urgency.  All the projects are years out from project approval as all the players creep forward.

Link to presentations from the Resource Development Council.

Presentations worth reading:

• Oil & Gas: Kara Moriarty, Executive Director, Alaska Oil and Gas Association

• Alaska Gas Pipeline Project Tony Palmer, Vice President, Alaska Development, TransCanada

• ASAP

• Stan Foo, President and General Manager, Donlin Gold LLC

Nova Gold Donlin Feasibility Study Complete - Includes Gas Line

Another milestone for gold mine developer Nova Gold.  The Donlin feasibility study is complete (LINK).  According to the new release NovaGold will power the mine with gas (LINK). Quote:

The capital cost of $6.7 billion, which was approximately $300 million lower than the guidance provided in September 2011, now includes the construction of a 500-kilometer natural gas pipeline that, at a cost of approximately $1 billion, which would deliver natural gas from the Cook Inlet to the mine site, and $984 million of contingencies. The change to utilizing natural gas was previously described as an upside case for the updated feasibility study. Its confirmation of viability is indeed an important modification that is believed to improve numerous project parameters including lowering operating costs; improving environmental management and social
infrastructure; providing flexibility for future operational modifications; and facilitating potential increases in the scale of operations in this geologically prospective district. The Company believes that the long-life nature of the Donlin Gold Project offers the potential to lower the capital expenditures through long-term off-take with third-party providers, including supply of natural gas. The Company now anticipates the Project permitting to commence in the first half of 2012.

From the NovaGold website this nugget (LINK), Quote:

Natural gas will be delivered to site by a 500-kilometer-long 12-inch-diameter pipeline. It will serve as the energy source for on-site power generation. This natural gas pipeline is a lower-cost alternative to the previously considered barging of diesel fuel. Operating costs include importing liquefied natural gas (LNG) by ship to Anchorage and total delivery costs to site which includes ship based regasification of the LNG and delivery from Anchorage to the Donlin Gold project via the pipeline. There may be an opportunity in the future to source natural gas from within Alaska.

Maybe this gas line is GO.  I'm still hunting a link to the actual study, I'll post a link when I find it. (UPDATE - Found the file.  Go to LINK then click on "View this company's public documents" and search for "Technical Report (NI 43-101)" dated Jan 12 2012). (Better link on the company website LINK).

Sounds like the NovaGold study is based on $13.33/MMBTU LNG from outside Alaska with the possibility of obtaining gas from within Alaska at some point in the future.  Their approach is a good one - Project cost are independent of the outcome of the larger Alaska Gas Pipeline debate / projects.

Good luck NovaGold - Best wishes for a safe and productive project.

Rep. Mike Chenault, Comments on Gas Line

No really news or hope from Rep. Mike Chenault, Speaker of the House of Representatives: (LINK to video).


Skip forward to the 13:40 mark for talk about gas lines.  Glimmer of hope: Donlin Creek.  Favorite quote:"Gotta have a buyer, Gotta have a Seller".

NovaGold - LNG Imports

NovaGold has completed the updated feasibility study for the Donlin Creek project.  It's good reading and looks like a great project if it gets funded.  Alaska Gas angle - The project will build a 300 mile 12" diameter gas line to transport gas from the Anchorage area. The project will depend on gas from IMPORTED LNG. (LINK) and quote:

Natural gas will be delivered to site by a 500-kilometer-long, 12-inch-diameter pipeline. It will serve as the energy source for on-site power generation. This natural gas pipeline is a lower-cost alternative to the previously considered barging of diesel fuel. Operating costs include importing liquefied natural gas ("LNG") by ship to Anchorage and total delivery costs to site which includes ship based regasification of the LNG and delivery from Anchorage to the Donlin Gold project via the pipeline. There may be an opportunity in the future to source natural gas from within Alaska

I read this as LNG gas plus a small pipeline is the baseline cost that doesn't depend on other projects.  They can always switch to Alaskan gas when and if that becomes available.  If the project goes forward it would make a great anchor customer for some of the proposed Alaskan gas pipeline projects.