Gov. Walker says changes are coming for LNG project

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Changes are coming to state plans for the liquefied natural gas pipeline.

But Governor Bill Walker and executives with the state’s three pipeline partners aren’t quite ready to say what those changes are.

Gov. Bill Walker addresses the media in Anchorage on Feb. 17, 2016. (Photo by Annie Feidt, APRN - Anchorage)
Gov. Bill Walker addresses the media in Anchorage on Feb. 17, 2016. (Photo by Annie Feidt, APRN – Anchorage)

At a press conference this morning in Anchorage, leaders with ExxonMobil, BP, and ConocoPhillips joined Walker to announce they are “exploring options” to advance the pipeline.

Walker emphasized the importance of completing the project.

“We know that most likely there needs to be some modifications in some way and so we sort of come back to the drawing board a bit on how to look at this project a bit differently,” Walker said.

The executives said they would complete the preliminary front-end engineering and design work – known as “pre-feed” on schedule by this fall.

But ConocoPhillips Alaska President Joe Marushack didn’t offer assurances beyond a commitment to explore options.

“What were trying to do is get through the pre-feed process,” Marushack said. “Clearly the economic headwinds are pretty tough right now, but we’ve got to see what the project costs before we can make a statement if we should participate and go forward or not.”

Energy industry experts have said that the project doesn’t make economic sense at today’s natural-gas prices.

The announcement put into doubt the state’s timeline for the project.

Walker earlier said that he would seek a state constitutional amendment to provide cost certainty to the energy companies who are working with the state on the project.

But with negotiations on the pipeline proceeding slowly, it has become increasingly unlikely that the amendment would be ready.

Today, the governor said that he isn’t ruling out the amendment, but the state may be able to provide cost certainty without an amendment.

The project has an estimated cost of $45-65 billion.

Speaker of the House Mike Chenault said in a statement he wished there was something more concrete that came from today’s announcement.

The Nikiski Republican added that he welcomes greater scrutiny of the cost of the project, which is the largest proposed infrastructure project in the world.