The Alaska LNG Project hosted a community meeting in Anchorage on Tuesday night. About 90 people listened to an explanation of the newest version of a plan to get natural gas from the North Slope to market.
Project manager Steve Butt explained this project is different from previous failed attempts to build a gas pipeline.
“An LNG project is when resource owners work together to create an infrastructure to connect that resource to a market,” Butt said. “It’s regulated differently, it has different business risks, and it’s a different business model. A pipeline is an important part of our project, but what we’re really trying to do is deliver gas to global markets, not to just any one market.”
Butt said that Alaska has some advantages over other natural gas producers. Unlike for oil, the cold weather helps when transporting gas because it keeps the gas condensed. It only takes two weeks to ship LNG to Asia from here. And the project can use some of the oil-drilling infrastructure that’s already in place.
But the hour and a half long presentation still left some community members with questions, especially about the economics of the project and the viability of the long-term LNG market. Butt says he can’t talk specifics, however they are researching markets during this preliminary design phase.
“We don’t ever really talk about but what marketers do is they work with buyers to understand their interest and appetite for the gas and they come up with structures that work for their buyers over very long time frames and prices that work. And they build in mechanisms that create different flexibilities to recognize different risks.”
Wasilla resident Carol Shay said she questions how to predict the future markets – what if China decides to use renewables instead?
“Boy, it’s a risky thing. It’s amazing,” she said. “But we might benefit tremendously, so…”
Community member Ross Bieling agreed, “It’s very important. Not just for jobs. It’s important to improve the living standards for those who haven’t enjoyed them previously.”
Bieling referenced the five potential outtakes from the line that would provide natural gas to Alaskans. At the moment, only two are set – one for Fairbanks and one for Anchorage.
At this point, the LNG project is still in the preliminary design phase. Butt said it could take up to six years to obtain the hundreds of necessary permits, secure the market, and finalize the design. Then it would take another six years and anywhere from $45 to 65 billion to build.