Data Dump and Walker Talk

This week the Alaska LNG project submitted a series of draft environmental and socioeconomic reports to the Federal Energy Regulatory Commission (FERC).  FERC is responsible for conducting the environmental review of the project.

You can find the files at the FERC elibrary site (FERC LINK) and search docket number PF14-21:

 

I'm still downloading and sorting through the documents - so far I don't see anything shocking or new but I'll post any snippets of interest.

Other project news of interest: Gov. Bill Walker  and his team are in New York explaining how they will manage through the current dip in oil revenues. (LINK to Alaska Journal of Commerce).  Whatever misgivings Gov. Walker may have about the project it is now his job to promote the project and represent the project as a source of future revenue.  We should all wish him good luck on his mission to protect the State's bond ratings.  Those ratings play a huge role in the cost of capital to build the project.  At today's low interest rates no one talks much about financing the project, but stay tuned - the day will come when interest rates matter a lot and the date of first revenue matters a lot. 

Speaking of Gov. Walker's misgivings, this week the Governor spoke to lawmakers and indicated in a conditional sort of way that he would drop his Point Thomson lawsuit  (Alaska Dispatch Link) and quote from Alaska Dispatch story: 

Walker said he will move to dismiss his lawsuit after introducing legislation Friday intended to address his concerns.

We'll see what he expects to get out of this legislation but the story in Juneau should flange up with the story in New York. (LINK TO GOV. WALKERS COMMENTS) 

Finally here's a link to an editorial from my favorite Okie Boone Pickens (FORBES LINK) "To Kill A Pipeline...Or Two: The Sad Reality Of Obama's Energy Thinking"  Boone may be an Okie but understands that Obama's Alaska wilderness plans can will kill Alaska oil.  It's off topic for this Alaska LNG project blog, but what's bad for TAPs is bad for LNG too. 

Project FERC Filings and More

The sleepy AK LNG project is generating a flurry of FERC filings.  None are monumentally interesting or overly informative, but if you are following the project take a look and enjoy the filings:

1) Summary of the 10/29/14 telephone conversation re  Alaska Gasline Development Corporation's Alaska LNG Project under PF14-21

2) Summary of the 10/28/14 Telephone conversation re Alaska Department of Natural Resources' Alaska LNG Project under PF14-21

3)   Summary of the 2014-January-2015 conference call between FERC Staff, Alaska LNG Project Staff et al re the Bi-Weekly Pre-filing Process conference call for the Alaska LNG Project  under PF15-21.

4)  Summary of the 10/27/14 Interagency Meeting re laska Gasline Development Corporation's Alaska LNG Project  under PF14-21.


5) Summary of the 10/30/14 Telephone conversation re Alaska Gasline Development Corporation's Alaska LNG Project under PF14-21.


This sounds chilling (i.e. what fresh regulatory horrors are brewing?):

• In addition, the project will require an Alaska National Interest Lands Conservation Act section 810 evaluation. (BLM and the DOI)
•  There is a new arctic policy, which this project will be the test case for its development. This policy is an integrated approach to approving development or projects in the arctic region. This group is wondering how to integrate its process into the National Environmental Policy Act process. (DOI)
  

 6) Alaska LNG Project Monthly Pre-Flining Status Report No. 4 (December 2014)by Alaska Gasline Development Corporation, BP Alaska LNG LLC,ConocoPhillips Alaska LNG Coompany, ExxonMobil Alaska LNG LLC, & TransCanada Alaska Midstream LP under PF14-21.

7) Alaska LNG Project - Community Meetings Summary Letter by Alaska Gasline Development Corporation, BP Alaska LNG LLC, ConocoPhillips Alaska LNG Company, ExxonMobil Alaska LNG LLC, TransCanada Alaska Midstream LP under PF14-21.


Other News: H.R. 351, The LNG Permitting Certainty and Transparency Act  passed the House of Representatives with a vote of 277-133.  Bill Link

Project Data Filed with FERC

Lots of AK-LNG project filings:

(FERC FILINGS)

Project Legislative Briefing

Project Description (public version)

ALASKA LNG FERC FILINGS

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 http://energy.gov/fe/downloads/alaska-lng-project-llc-14-96-lng

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

$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)

Project Pulse: Flatlined

 

The latest Alaska Pipeline Project's Pre-Filing Status Report for 2ed Quarter 2013 is a one pager that shows less progress than the last no-progress report (LINK TO FERC ELibrary).

Here's the content of the report:

• Open Season:  Notice was provided to the Commission on May 3, 2012 that the first binding Open Season was terminated as of that date. 
• Public Outreach: A Stakeholder Engagement Plan was filed with the FERC on April 5, 2010. No engagement has occurred in the past quarter. 
• Pipeline Right-of-Way and Engineering: Pipeline engineering and technology development work initiated to date has been completed and documented.
• Gas Treatment Plant (GTP): Engineering deliverables have been archived for potential future use.
• Environmental Planning and Permitting: No Environmental planning or permitting work has been conducted in the past quarter, although invoices for 2012 work continue to be processed.
• Project Meetings: The project had no additional contact with federal, state, and local agencies that have regulatory approval or other interests regarding the Project in 2Q2013. 
• Project Activity in Canada:FERC requested an update of Project activities in Canada in these activity reports. Completed remaining field program work and permit requirements with federal and territorial and provincial governments.

Aside from Bill Walker no one seems to be agitated by this de facto termination of the project. According to some observers it's not time to blow down the North Slope gas. (LINK).  If it's not time to blow down the gas why does Alaska continue to burn AGIA money?

Here's a look at the AGIA funds expended as of the January 2013 report:

 

If the Quarterly FERC report is an accurate indication of the project health why do Alaskans continue to shovel money at it?

FERC Notice of Intent for EIS

The Federal Energy Regulatory Commission (FERC) has issued a Notice of Intent to proceed with preparation of the Environmental Impact Statement (EIS). It's difficult to link to the FERC document, but it's available on FERC.GOV, search Docket Number PF09-11-000 or accession number 20110801-3001. I'll send you a copy by email upon request - just leave a comment.

Quote from the Notice of Intent:

Summary of the Planned Project

The APP would involve construction and operation of a new pipeline system to transport up to 4.5 billion cubic feet of natural gas per day (Bcfd). Specifically, the planned project includes the following major components in Alaska:

· About 58 miles of 32 inch diameter pipeline and associated aboveground facilities (the Point Thomson Pipeline) from the processing plant at the Point Thomson Field to a planned gas treatment plant (GTP) near Prudhoe Bay, Alaska;

· A new GTP near Prudhoe Bay capable of producing up to 4.5 Bcfd of pipeline-quality gas;

· About 745 miles of 48 inch diameter pipeline and associated aboveground

ancillary and auxiliary facilities (the Alaska Mainline) from the GTP to the Alaska-Yukon border. The Alaska Mainline would have a maximum allowable operating pressure of 2,500 pounds per square inch;

· Construction of at least five delivery points, eight compressor stations, two meter stations, various mainline block valves, and pig launching/receiving facilities; and

· Associated infrastructure such as access roads, helipads, construction camps, pipe storage areas, contractor yards, borrow sites, and dock modifications and dredging at Prudhoe Bay.

The planned Alaska Mainline would start at the GTP and generally follow the existing Trans-Alaska Pipeline System crude oil pipeline (TAPS) and adjacent highways southeast to Delta Junction, Alaska. From Delta Junction, the mainline would diverge from TAPS and generally follow the Alaska Highway southeast to the Alaska-Yukon border. At the Alaska-Yukon border, the pipeline would interconnect to a new pipeline in Canada to deliver gas to North American markets through the Alberta Hub or other facilities with existing off-take capacity at or near the British Columbia/Alberta border.

One item of special interest for proponents of the Valdez LNG option:

The project proponent is also considering an alternative proposal to build a natural gas pipeline to Valdez, Alaska for delivery into a liquefied natural gas (LNG) plant for liquefaction and export to global LNG markets. Because the Commission has received very little information on the LNG plant and the associated pipeline, the Valdez proposal is not sufficiently developed for the FERC to include in the environmental review at this time

Ouch! That indicates that nothing permit-able has transpired on the LNG option.

Is FERC going through the motions or is this real progress for the project. As always there's too little information and no indication of pending commitments.

EIS Flowchart from the Notice of Intent:

Denali Timeline

The latest FERC filing by Denali includes this time line for the current and near term open season activities: This fragnet ends with filing confidential precedent agreements with FERC on 23 March 2011.

There's a few wiggle words about "highly conditioned bids" and resolving "conditions within its control" but overall progress continues.

Denali Open Season Starts Tuesday 6 July 2010

See the detailed FERC filing (LINK)

The link contains one letter and three volumes of open season information. The In-State Demand Study is in Volume II- Good reading if your #1 issue is In-State industrial development and the $8 Billion Bullet Line.

Volume III has technical stuff, and the cost estimate ($35.5 Billion)

Some quick ratios to think about: $35.5 Billion moves 4.5 BCFD ($7.9 per cfd capacity) vs. $8 Billion for up to 0.5 BCFD for a bullet line ($16 per cfd capacity). The economies of scale work for the big line and against the Bullet Line.

Good Luck Denali ! Let's start building this damn thing!

Note: the competing TransCanada / ExxonMobil Alaska Pipeline Project open season is in progress and end 30 July 2010. Good luck to you guys too - I looking forward to the Kumbaya moment when all the producers join together.

Yukon Pacific LNG - Anderson Bay

Who would want to build an LNG plant near Valdez I wondered when the TransCanada/ExxonMobil open season documents came out describing an optional line to Valdez. I figured ConocoPhillips / Tokyo Electric - Tokyo Gas would surface as likely LNG plant builders, or maybe the Chinese or Koreans. Scratch that prediction - turns out Yukon Pacific (owned by CSX) has filed with FERC for an extension . (LINK to Petroleum News)

Yukon Pacific argues that the current open season efforts justify an extension. Quoting from the FERC filing:

There is now an additional reason for extending Yukon Pacific’s deadline. Since the Commission’s 2007 extension, industry efforts to commercialize North Slope gas have increased dramatically. The most visible and meaningful of these are the “pre-filing” steps taken by the two leading projects for delivering North Slope gas to Alaska and Lower-48 markets. The implementation of either project would greatly facilitate LNG exports by, among other things, creating pipeline infrastructure that can be leveraged. Given these developments, it is important that the LNG option represented by Yukon Pacific’s proposal remains viable as the “open-season” and other market-related activities for these projects play out. The ongoing effectiveness of the place of export approval granted in this docket is critical to that viability.

Of course every Alaska Gas silver lining has an associated cloud called Tom "Playa Hater" Irwin. A couple of years back he denied a Yukon right of way request. (LINK)

Maybe the stars can align for the LNG option -


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Flurry of FERC Filings

This week a number of firms filed motions or comments with the Federal Energy Regulatory Commission (FERC). Active engagement from the producers and affected parties is a good sign. Remember FERC matters - FERC issues permits for pipelines. That other four letter acronym AGIA - (Alaska Gas Inducement Act) does not.

ConocoPhillips Alaska, Inc. Comment on Filing Motion/Notice of Intervention

The State of Alaska Motion/Notice of Intervention

Notice of request for approval of plan for conducting an open season re TransCanada Alaska Company LLC

BP Exploration (Alaska) Inc. Comment on Filing

ExxonMobil Gas & Power Marketing Company, a division of ExxonMobil Corporation (as Agent) Comment on Filing

Motion to Intervene and Comments of BG Alaska E&P, Inc. (LNG?)

FYI - The FERC elibrary site is not one of the best. It only works about 50% of the time on the weekend. Update - Sunday morning - FERC website and these links are O-tay.

APP Open Season Details

I've had some time to scan through the "APP" (Alaska Pipeline Project) open season documents and here are a few first impressions:

• In Service Date: 2020 - Hey I'll be SIXTY! OMG I'll be SIXTY!
• Cost to move gas to Alberta: $2.43-$3.13/MMBTU
• Cost to move gas to Valdez: $2.22-$2.89/MMBTU
• Point Thomson is a vital part of the overall project

Overall I'm encouraged by the numbers - it actually looks achievable. At a minimum the cards are on the table and other parties can start ciphering on the cost of an LNG plant, the value of Alaska Gas for tar sand production, and a reasonable tax structure.

Anybody want to take a stab at the cost of the LNG plant? My quick calculation say the LNG plant would have a capacity of 18 million tons per year LNG and cost $31 Billion. Somebody check my math. We really need a good cost estimate of the LNG plant to compare the options.

Here's some images from the document showing the pipeline options and capacities:





Assorted headlines:

EDMONTON JOURNAL:Alaska gas could bypass Alberta Option would send fuel to Valdez

UPI TransCanada details Alaskan pipeline plan

GLOBE AND MAIL: TransCanada seeks Alaska project commitments

OIL & GAS JOURNAL: Alaska Pipeline Project files open season plan

REUTERS: Exxon, TransCanada raise Alaska pipeline estimates