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    New LNG Project Emerges on Alaska’s North Slope

Summary

First phase of floating project could be operating as early as 2025

by: Dale Lunan

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New LNG Project Emerges on Alaska’s North Slope

A new LNG export project in Alaska emerged October 23 with a heads of agreement (HOA) signed between US supermajor ExxonMobil and Qilak LNG, part of the global Lloyds Energy group, to supply 560mn ft3/day of stranded North Slope gas to a 4mn mt/yr floating liquefaction facility offshore.

“The Qilak LNG 1 project would deliver on Alaskas long-held goal of commercialising North Slope natural gas,” Qilak LNG CEO (and former Alaska lieutenant governor) Mead Treadwell said. “With this HOA and our recently completed pre-feasibility study, Qilak will now begin extensive feasibility efforts, including preliminary permitting, with a target of reaching a final investment decision (FID) by 2021.”

Assuming FID in 2021 or 2022, the project could begin operations as early as 2025.

Using liquefaction and ice-breaking LNG tanker technology pioneered by the Yamal project in Russia, Qilak would export LNG directly from the North Slope to markets in Asia, without the need for a long-distance pipeline to deliver feed gas or major off-take commitments from buyers – barriers that have stalled the development of the $43bn Alaska LNG project.

Without that pipeline requirement, and by using proven near-shore liquefaction technology, Qilak LNG 1 carries an estimated capital cost of about $5bn.

ExxonMobil would deliver the feed gas for the project from its Point Thomson field, which holds an estimated 8 trillion ft3 of natural gas.

“ExxonMobil sees the development of the Qilak LNG 1 project as an opportunity to develop Alaska’s gas resources,” ExxonMobil Alaska president Darlene Gates said. “As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska’s gas to market.”

Qilak LNG 1 has the support of Japan’s Bank for International Cooperation, and will not be seeking any Alaska state or US federal funding.