A long way for not much
When it comes to moving to market the North Slope’s 35 trillion cubic feet of proven, and stranded, natural gas reserves, Alaska finds itself all dressed up with nowhere to go.
After years of effort – not to mention the expenditure of hundreds of millions of dollars – construction of the Alaska LNG Project has been approved by the Federal Energy Regulatory Commission.
The $43 billion project – which requires other approvals before construction could begin – would move the gas south through an 807-mile, 42-inch pipeline to a gas liquefaction facility at Nikiski for shipment to the Pacific Rim.
It is a milestone, of sorts. The problem? There is little demand for Alaska’s gas. Prices have been hard-hit by a gas glut caused by the coronavirus pandemic. Buyers and investors are not lining up for a piece of the Alaska LNG action.
It may stay that way for some time. Alaska would find itself competing in the packed market with other liquefied natural gas giants such as Qatar, Australia, Russia and Papua New Guinea.
The Alaska Gasline Development Corp., which leads AK LNG, says it is looking for private entity to take over the massive project, and, if one cannot be found, it suggests selling off the project’s assets and shutting it down. Gov. Mike Dunleavy for years has advocated the state give up its pipeline leadership role and hand it over to private interests.
Glutted markets. Lousy gas prices. Little investor interest. It seems Alaska has come a long, expensive way for not much.