All CATEGORIES
☰ Menu
Ohio Utica Shale

Nikiski emerging as top Alaska site for LNG exports

By Bob Downing Published: October 8, 2013

From the Associated Press:

By BECKY BOHRER

 

Alaska has price advantages that could make it a competitor in the Asian natural gas market, a federal official said, though it remains unclear when or if a gas line project capable of exports will be built.

On Monday, Exxon Mobil, BP, ConocoPhillips and TransCanada Corp. announced the Kenai Peninsula town of Nikiski is the leading contender for the terminal site where gas would be liquefied and shipped to Asia. The decision, applauded by state leaders as a sign of continued progress, signaled that a decades-old dream could become a reality even though major hurdles remain.

Larry Persily, federal coordinator for Alaska natural gas pipeline projects, said the state is closer to Asia in terms of tanker voyages than, say, the U.S. Gulf Coast, Middle East, Africa and even some proposed projects in Canada's British Columbia. He said liquefaction plant compressors run more efficiently when it's cold — a plus for Alaska's colder climate — and its well-known that Alaska has the gas; it comes up with oil.

The pipeline would span 800 miles from the prodigious North Slope to south-central Alaska, and the mega-project could cost $45 billion to more than $65 billion. The companies have not yet committed to build and have made repeated calls for "competitive, predictable and durable" terms on oil and gas taxes and royalties.

Persily said the companies must feel comfortable that Alaska can compete in Asia or they wouldn't be spending time and money on pursuing the project.

Senior project manager Steve Butt said three or four other sites are still being considered, but Nikiski has the land needed for the plant, and the companies know they can route a pipeline there. Land acquisition work is underway. He declined to identify those other sites.

Another advantage for Nikiski, a town of about 4,600 people located 10 miles north of the city of Kenai, is that routing a pipeline there would allow the state's major population centers, including Fairbanks and Anchorage, to access gas from the line, he said.

A liquefied natural gas plant operated in Nikiski for decades and provided exports to Japan. But ConocoPhillips and its then-partner, Marathon Oil Corp., announced plans to close the plant in 2011, citing market changes. Sporadic shipments continued until ConocoPhillips announced earlier this year that it had decided not to renew its export license. The state has asked ConocoPhillips to reopen the site and apply for a new license to provide an incentive for petroleum companies to explore and invest in Cook Inlet.

Butt said the liquefied natural gas plant envisioned as part of the pipeline project would be 16 or 17 times larger than that plant.

Alaskans have long dreamed of a gas line as a way to create jobs, provide energy for residents and shore up revenues as oil production declines in a state where it has long been the economic life blood. Monday's announcement was another step toward building a gas pipeline to rival the trans-Alaska oil pipeline.

"A Nikiski area liquefaction plant and export terminal will be a multi-billion investment and huge shot in the arm to both Alaska's economy and confidence in our state's energy future," U.S. Sen. Mark Begich, D-Alaska, said in a statement. "A gas line from Prudhoe Bay to the Kenai Peninsula can meet Alaska's in-state energy needs while supplying the energy-thirsty countries of the Asia Pacific."

 
Print
Add This

SUBSCRIBE VIA RSS

OHIO.COM VIDEOS

See the most recent drilling report and an injection wells map From NewsOutlet.org

Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.