JUNEAU - A state corporation is seeking almost $4.5 billion in federal funding to help build a $5.9 billion pipeline to move North Slope natural gas to Fairbanks.
The project is being promoted as the first phase of the state-sponsored $38 billion project to move North Slope gas more than 800 miles to Nikiski, on the Kenai Peninsula, where the gas would be supercooled into a liquid and loaded aboard 1,000-foot-long tankers to buyers in Asia.
The larger project to transport and sell North Slope natural gas overseas has been around for decades, always failing to pass a financial viability test. The state and North Slope oil companies have spent more than $1.5 billion over the past decade to design and permit several versions of a gas pipeline project, and though the work has produced permits it has not resulted in any commitment to construction.
The state has been managing the work the past five years after North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips walked away from the larger project, citing its weak economics.
A resolution approved by the Alaska Gasline Development Corp. board of directors on Feb. 4 said the state agency has identified a private developer willing to lead the smaller project to Fairbanks.
The corporation did not identify the private party for the scaled-back venture.
Frank Richards, the corporation president, estimated the cost of the shorter project at about $5.9 billion. He said federal money would be necessary to make it work, putting the federal share at 75%.
In his presentation to the board, Richards said getting a share of federal economic stimulus funding or infrastructure development money would be key to attracting private investment.
The initial phase to Fairbanks is being pitched as a way to create jobs; provide cleaner energy to a part of Alaska that struggles with air quality issues; and seize on opportunities to advance energy or infrastructure projects under the Biden administration.
The state corporation has contracted with firms for consulting and communications assistance totaling almost $250,000 to help convince Congress, the Biden administration and others of the value of the Alaska project. Two former Alaska elected officials — Democratic U.S. Sen. Mark Begich and Republican Gov. Sean Parnell — are working under those contracts.
Gov. Mike Dunleavy has long supported a North Slope gas pipeline project but has been clear that he does not support the state continuing as the project leader and would prefer that private developers write the checks and take the risk. Federal funding had not been publicly discussed by the state gas line corporation until its board meeting.
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