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United States Procurement News Notice - 87538


Procurement News Notice

PNN 87538
Work Detail Alaska Gasline Development Corporation (AGDC), the developer of a liquefied natural gas (LNG) project in the U.S. northernmost state, has signed a framework agreement with compatriot energy player Glenfarne Group for the latter to privately lead and fund the development of the project. On January 6, 2025, AGDC President Frank Richards and Alaskan Governor Mike Dunleavy hosted an energy conference in Anchorage, announcing an exclusive framework agreement to develop Alaska LNG following ten years of design and permitting work. “Today, after 10 years of planning, engineering, and permitting, I’m announcing that AGDC has reached an exclusive framework agreement with a qualified energy company to privately lead and fund the development of the Alaska LNG project, including the Arctic Carbon Capture plant on the North Slope. The LNG export facility in Nikiski and the pipeline, which will transect the state and deliver North Slope natural gas to Alaskans,” said Richards. Richards noted that the terms of the framework agreement have been negotiated and the next step is for both parties to create legally binding development agreements that will move the project forward. He noted that a formal announcement of the definitive agreements is expected within the next few months. On that same day, outgoing President Biden disclosed plans to protect areas of the United States, including portions of the Northern Bering Sea in Alaska, from future oil and natural gas leasing. President-elect Donald Trump responded by vowing to undo the drilling ban. “The Alaska LNG project will allow Alaska to deliver natural gas from a proven energy source that markets demand. Alaska LNG uniquely offers superior economics, close proximity to Asian markets driving LNG demand growth, and the ability to eliminate up to 2.3 billion tons of global emissions by replacing dirtier fuel sources with clean burning Alaska natural gas,” added Richards. While the company’s name was initially not disclosed, on January 10, 2024, Offshore Energy reached out to AGDC, whose spokesperson confirmed that the company in question is Glenfarne. Furthermore, a Glenfarne spokesperson told Offshore Energy: “Glenfarne confirms it has entered into an exclusive agreement with the Alaska Gasline Development Corporation (“AGDC”) for the development of the Alaska LNG project, including the Alaska Export Facility, Pipeline, and a Carbon Capture facility. As well, Glenfarne and ENSTAR Natural Gas Company have entered into an exclusive agreement to advance an LNG import project utilizing the Alaska LNG export site.” Glenfarne is developing a 4-mtpa project in Texas’ Port of Brownsville. Kiewit was recently selected to lead the engineering, procurement, and construction (EPC) for the proposed terminal. The two will work on completing the pre-final investment decision (FID) engineering required for the project to proceed to an FID. London-listed Pantheon Resources, which entered into a gas sales precedent agreement (GSPA) with 8 Star Alaska, a subsidiary of AGDC, welcomed the announcement by the AGDC. “We are delighted with the progress made by Frank and the AGDC team. This moves the Alaska LNG project a step closer to fruition and, upon execution of definitive agreements, providing long term energy security for the State of Alaska,” said David Hobbs, Executive Chairman of Pantheon Resources. “As a reminder, Pantheon and AGDC signed a Gas Supply Precedent Agreement in June 2024, under which Pantheon would supply its natural gas into the pipeline pursuant to a definitive gas sales agreement to be negotiated in the coming months. We look forward to project progress as the parties work together to realise Phase 1 of ‘Alaska LNG’ (the gas pipeline) and ultimately the full ‘Alaska LNG’ project.” Approval of letter of credit by Alaska’s development financing authority The private investment was made possible by the approval on December 4, 2024, by the Alaska Industrial Development and Export Authority (AIDEA) of a resolution to advance the development of the Alaska Natural Gas Pipeline Phase 1, which involves developing the gas pipeline from the North Slope to Southcentral and Interior Alaska markets. As reported, AIDEA and AGDC were in discussions with industry participants to update the project’s front end engineering design (FEED) study which is required before a final investment decision (FID) can be made. “The future for AIDEA involves projects such as the Alyeschem North Slope methanol plant, the Alaska Natural Gas Pipeline Project, and future ANWR oil lease development with potential state revenue of $2 billion a year according to federal estimates,” said Executive Director Randy Ruaro. On that same day, the AGDC released a statement regarding AIDEA’s decision to support the development of Alaska LNG Phase 1. “Today’s resolution authorizes AIDEA to negotiate and sign a letter of credit to backstop front-end engineering and design (FEED) for the Alaska LNG pipeline, bringing Alaska a critical step closer toward a privately funded in-state natural gas pipeline. The letter of credit will allow AGDC to unlock up to $50 million in private investment needed to move the Alaska LNG pipeline through FEED, the remaining development stage that must be completed before a final investment decision can be made,” said AGDC. The firm added that it was “in advanced discussions” with potential project partners to privately fund and complete FEED, noting that updates would be shared as new developments happen. Furthermore, it was stated that the letter of credit for FEED would only be utilized if an FID is not reached, at which time AGDC will own the completed pipeline engineering and design work. Project overview Alaska LNG intends to use what the developers say are clean, energy-efficient, and safe production methods to deliver a stable supply of natural gas for commercialization and in-state distribution. The project is expected to deliver an average of about 3.5 billion cubic feet of gas per day, much of it for international markets. The gas will be sourced from Prudhoe Bay and Point Thomson fields. These fields will produce, on average, about 3.5 billion cubic feet of gas per day with approximately 75% coming from the former and 25% from the latter. The liquefaction facility, located in Nikiski, southwest of Anchorage, will process, store, and transport up to 20 million tons of LNG per year using the propane precooled mixed refrigerant (C3MR) Process, an technology patented by Air Products. The facility is set to include three LNG trains, two 240,000 cubic meter storage tanks, terminal facilities and marine services, as well as two loading berths to accommodate LNG carriers up to 217,000 cubic meters (Q-Flex). The 807-mile, 42-inch diameter mainline pipeline, including an offshore pipeline section crossing Cook Inlet, is described as the backbone of the proposed project. With a daily capacity of 3.3 billion cubic feet, multiple compressor stations along the pipeline will help carry natural gas from the North Slope to Southcentral Alaska. The pipeline would be underground, with the exception of two planned aerial water crossings, aboveground crossings of active faults, and the offshore pipeline. Multiple interconnection points would be installed along the pipeline to bring in-state gas to Alaskans. Its average throughput would be 3.1 billion cubic feet per day, with a maximum capacity of 3.3 billion cubic feet per day A gas treatment plant is envisaged to be located in Prudhoe Bay near existing oil and gas infrastructure. The plant would be comprised of three process trains to remove impurities from the natural gas that could flow from the Point Thomson and Prudhoe Bay reservoirs. Carbon dioxide would be removed, captured, and compressed for reinjection into the Prudhoe Bay reservoirs. The average daily capacity would be 3.5 billion cubic feet and the maximum capacity 3.9 billion cubic feet per day. Economic viability assessment Alaska’s Governor sent a memorandum dated November 12, 2024, to the members of the Alaska State Legislature. Noting the “looming Cook Inlet crisis” as the most critical energy issue facing Alaska policymakers, he provided Wood Mackenzie’s paper called ‘Economic viability assessment and economic value of the Alaska LNG project – Phase 1.’ As AGDC is leading the development of Alaska LNG on behalf of the state, Governor Dunleavy directed the firm to create a phased construction strategy for Alaska LNG. Alaska LNG Phase 1 prioritizes construction of the pipeline to more quickly deliver North Slope natural gas to Interior and Southcentral Alaska and resolve the Cook Inlet energy crisis. while Alaska LNG Phase 2 includes the infrastructure components needed to convert gas to LNG and export it. The legislature previously asked that an independent third-party review of the project proposal that would commercialize North Slope gas be completed and presented by December 20, 2024. When this was sought, the legislature noted that all parties would work toward FEED for Phase 1 of the project if the analysis showed “a positive economic value to the state.” Wood Mackenzie was to present the economic case for quickly constructing the Alaska LNG pipeline to legislators at the House Resources Committee hearing on November 19, 2024. Environmental backlash The project has faced some opposition from environmental groups, most notably Greenpeace and Center for Biological Diversity. While the federal government’s announcement from January 2024 requiring updates of the underlying economic and environmental analyses for authorizations of exports to non-FTA countries is seen as a step in the right direction, Greenpeace believes stringent integrity and oversight measures still need to be taken to prevent the updated analyses from being mismanaged.
Country United States , Northern America
Industry Oil & Gas
Entry Date 16 Jan 2025
Source https://www.offshore-energy.biz/alaskas-lng-project-moves-closer-to-reality-after-10-years-in-the-making-with-glenfarne-as-private-investor/

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