Uncertainty of Alaska LNG Project Discussed at State Legislature Hearing

The Alaska Journal of Commerce reports that new Alaska Gasline Development Corp. (AGDC) President and CEO Keith Meyer presented a plan to Alaska’s joint House-Senate Resources Committee to overhaul the financial structure of the proposed Alaska LNG Project. The plan would allow the state to lead the project with other outside investors, “but still depend on the producers selling their shares of natural gas from the Prudhoe Bay and Point Thomson fields into the project.” AGDC represents Alaska’s 25% stake in the project, which includes an 800-mile pipeline to access North Slope gas supplies and an LNG export terminal. Meyer told the legislators that adding responsibilities to Alaska’s role in the project would not equate to adding risk. Some legislators questioned Meyer “as to why it would be prudent for the state to move forward with a project that the world’s largest companies in the business are wary of.” According to the report, due to changed market conditions, the producer sponsors no longer support the project. BP and ExxonMobil representatives testified that while their companies continue to support an aligned project with the state, they acknowledged the market challenges. A ConocoPhillips Alaska Project representative said the company is committed to completing the pre-front end engineering and design, or pre-FEED, process this year but is not likely to commit to the FEED stage in 2017.