Alaska LNG export project advances despite oil price fall

ANCHORAGE, Alaska (AP) – Work on a proposed Alaska pipeline that could be part of a system to export

liquefied natural gas to Asia is moving forward despite collapsing oil prices, according to officials connected to the project.

The lower price of oil is delaying at least two other North American LNG export projects but has not stopped the Alaska venture because of its size, projected timelines and a partnership involving some of the world’s largest companies, the Alaska Dispatch News reported.

“Our mission hasn’t changed, and to my knowledge none of the investing

companies are looking to change that at this time either,” said Steve Butt, senior manager for Alaska LNG and an Exxon employee.

The project would include an 800-mile pipeline to move North Slope natural gas to a southcentral Alaska plant, where it would be chilled, loaded on LNG tankers and shipped to Asia.

The cost is estimated at $45 billion to more than $65 billion. The state of Alaska, Exxon, BP and ConocoPhillips are equity partners.

The project is a giant among dozens of LNG export projects being pursued, but most probably will not be built, said Larry Persily, federal pipeline coordinator.

One difference between the Alaska LNG and others is the timeline. Investment decisions must be made for some projects based on the expectation of exporting gas in five years or less.

Alaska LNG is in an early study phase, with the parties focused on preliminary engineering and design.

A critical decision point comes next year when

companies decide whether they will continue to front-end

engineering and design before a

final critical decision to invest in 2018 or 2019. With an

estimated seven years of

construction, gas could move for shipping in 2025 or 2026.

The size of the Alaska

project might also help. Gas is expected to flow for three to five decades and it could weather fluctuations in the price, Butt said.

“Short-term price movements don’t impact a project with a very long life the same way they impact projects with a very short life,” Butt said. “Alaska LNG has a very long life.”