Alaska LNG Looks to Supply Domestic Market

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Written by Daniel Graeber for IIR News (Sugar Land, Texas)

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Summary

The developer of the Alaska LNG project said it signed a non-binding agreement to deliver natural gas to a gold mine in the state. New project specifics outline separate phases.

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Some Gas to Stay at Home

The developer of a gold mine in Alaska signed a preliminary agreement to secure natural gas from the first phase of the planned Alaska LNG facility, which is slated to address domestic demands.

Glenfarne Alaska LNG (Anchorage) is the majority owner and developer of the planned Alaska LNG project. On Thursday, the company said it signed a non-binding letter of intent with Donlin Gold LLC (Anchorage), which is developing an Alaskan gold mine owned by Novagold Resources (Vancouver, British Columbia) and Paulson Advisers (Portland, Oregon).

The letter outlines 50 million cubic feet per year in natural gas volumes from the project, which would help supply the gold mine with electricity.

"As Donlin moves into what we hope to be the largest single gold mine in the United States, natural gas from Alaska LNG could offer significant benefits not only for the mine, but for the entire Southwestern Alaska region," Greg Lang, the president and chief executive officer at Novagold, said in a statement. "We look forward to working with Glenfarne to unlock the value of both of these world-class Alaskan resources: Donlin Gold and Alaska LNG."

Glenfarne provided more specifics to a project dusted off by U.S. President Donald Trump during the first year of his second, non-consecutive term in office. Phase I would include the construction of a 765-mile, 42-inch pipeline that would address Alaska's domestic energy needs.

Phase I would be supportive of Novagold's mining efforts. The Crooked Creek Donlin Gold Mine and Mill has a design capacity of 22 million tons per year of gold ore. It's still in the planning stages and is listed as a low-probability project in IIR's database. Satellite imagery suggests the site is currently forested land.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Database can learn more about the Donlin Gold Mine--including capacities, investment values and necessary equipment--in a detailed plant profile.

Phase II would add on coastal infrastructure that would be able to produce 20 million metric tons of liquefied natural gas (LNG) per year for potential exports to Asia.

The entire facility faces challenges, largely from building a new pipeline through the Alaskan tundra. Global warming trends could curtail any construction windows for the facility.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can read more information on the Alaska LNG project.

Alaska LNG could run into market headwinds as well. A December report from the Institute for Energy Economics and Financial Analysis (IEEFA) pointed to an expected glut in the global LNG market before the decade is out. Demand, meanwhile, is lackluster, particular for Asian markets, the target of Alaska LNG deliveries.

By the Numbers

• 18.6 billion cubic feet in domestic feedgas
• 765-mile gas pipeline to initially support Alaskan needs
• 20 MTPA of LNG eventually slated for Alaskan exports

Honeywell Tapped for Support at Commonwealth LNG

Elsewhere, the developers of the long-delayed Commonwealth LNG facility, slated for Louisiana, said they tapped Honeywell (Charlotte, North Carolina) to provide mixed refrigerant technology and six modular heat exchangers to help turn gas into the liquid form.

Though likely to proceed, the facility already has faced setbacks due to U.S. political decisions. Developers in October filed a request with the Federal Energy Regulatory Commission (FERC) to extend its construction permit, saying a pause on permits for new LNG export facilities enacted by former President Joe Biden meant it could not meet a 2027 deadline. The applicants asked for an extension to the construction permit to December 2031.

Subscribers can read a profile of Commonwealth LNG.

Broad-based political support from Trump is enhancing the nation's position as the world leader in LNG exports, but markets are bloated and prices are high. Domestically, mounting LNG export commitments could create headaches for the 40% of domestic consumers who rely on natural gas for electricity and heat.

IIR Energy in its NATGAS Today report for Thursday showed feedgas volumes into the eight operational export terminals reached 18.6 billion cubic feet, well above the federal average expected for the year.

Key Takeaways

• Alaska LNG looks to state demand.
• Commonwealth LNG taps Honeywell for support.
• Not all LNG projects will see the light of day.

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About IIR News
IIR News is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).

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