Alaska Governor Mike Dunleavy points to the merits of a new independent analysis on the Alaska LNG project, which estimates that the pricing of Alaska’s liquefied natural gas project would be lower than pricing for other U.S. projects that are competing for the same Asian markets. Alaska’s proximity to Asia also provides a shipping cost advantage.
“The Alaska LNG project is well positioned for Alaska to realize the decades-old dream of bringing our natural gas off the North Slope for the benefit of Alaskans and worldwide markets,” said Governor Mike Dunleavy. “With key permits and federal loan guarantees in place, the Alaska gasline is moving forward.”
In part, the project would build an 800-mile pipeline to transport natural gas from the North Slope to Southcentral Alaska for export. The recently passed Infrastructure Investment and Jobs Act reaffirmed the availability of an estimated $25 billion in federal loan guarantees for an Alaska liquefied natural gas project, which will increase the attractiveness of this energy project for investors.
Today, the Alaska Gasline Development Corporation released the report by the global research firm, Wood Mackenzie, which analyzes reduced project construction costs, a new project finance structure, and an estimated reduced natural gas purchase cost amounting to a reduction in LNG pricing. In this updated report from 2016, Wood Mackenzie forecasts LNG demand growth to last through 2050, driving LNG prices higher. The strong LNG demand is expected to create a gap in supply starting in 2028, which new projects are required to fill. Alaska LNG is competing to fill the supply gap, the report states.
The Alaska LNG project is a key U.S. energy security asset. Development of the Alaska LNG and natural gas pipeline project will greatly increase the United State’s LNG output and its ability to reduce allied energy dependence on global adversaries. Some 40 percent of European natural gas supplies are sourced from Russia, which, today, has troops staged on the border of Ukraine.
Alaska has ample gas supply. The North Slope Basin in Alaska holds more than 45 trillion cubic feet (TCF) of combined contingent natural gas resource and reserves, an estimated 299 TCF of undiscovered, technically recoverable conventional natural gas resource, and an additional 100 TCF of unconventional resources.
Read the Wood MacKenzie report here.