The proposed Alaska natural gas pipeline project picked up another nonbinding agreement last week. This time, the letter of support comes from Tokyo Gas Company, one of Japan’s largest energy utilities. It’s the fifth acquired for the project since Glenfarne, a private energy asset developer, took over majority project ownership earlier this year.
If it’s built, the Alaska LNG Project will move natural gas from the North Slope through a roughly 800-mile pipeline to Nikiski to be liquefied and shipped overseas.
Adam Prestidge is the project president with Glenfarne. He told KDLL last month that preliminary agreements, though nonbinding, are a necessary first step toward agreements that are binding. But he says that can take a while.
“Typically, an LNG contract like this, can take, you know, 12, 18, 24, months to go from initial concept to being a binding agreement,” he said.
Glenfarne celebrated the preliminary Tokyo Gas agreement in a press release for pushing the project over the halfway mark of its LNG export capacity.
Glenfarne Communications Director Tim Fitzpatrick said the project’s annual capacity boils down to two separate numbers.
The first is the natural gas capacity of the pipeline, measured as a volume in billion cubic feet. The second is the liquid volume of natural gas for export, measured as a weight in million tons.
Fitzpatrick says the pipeline has an estimated annual capacity of 3.3 billion cubic feet of natural gas per year. Of that, 15.2%, or 500 million cubic feet, is earmarked for in-state use by Alaska residents as natural gas. According to a report commissioned by the Alaska Gasline Development Corporation, that’s roughly double what Alaskans in the Anchorage, Matanuska-Susitna and Kenai Peninsula regions actually use each year – between 180 and 200 million cubic feet.
The remaining project output will be converted to 20 million tons of liquefied natural gas for export, Fitzpatrick said. Of that, 11 million tons already have tentative customers through the handful of preliminary agreements reached this year.
Glenfarne estimates it needs binding commitments for five million more tons of liquified natural gas to fund the full $44 billion project.
The Tokyo Gas announcement comes on the heels of a town hall Glenfarne held in Nikiski earlier this month to promote the project.
This week, the head of the International Energy Agency predicted a forthcoming increase in liquefied natural gas supply could change global markets. Reuters reports the shift is creating a buyer’s market, pushing prices down for importers in places like Asia.
Glenfarne is eyeing the end of this year to decide whether to move forward with project development or not.
