Concerns raised over state leading LNG project

  • By BECKY BOHRER
  • Wednesday, January 25, 2017 8:52am
  • NewsBusiness

JUNEAU — A legislative consultant has raised red flags about Alaska taking the lead on a major proposed liquefied natural gas project, even as Gov. Bill Walker has said he is comfortable with it.

In a recent report to lawmakers, consultant Nikos Tsafos outlined challenges threatening the project’s potential for success. They include a competitive market and a laundry list of tasks the state will need to achieve, such as finding buyers, insulating itself from cost overruns and buying gas at commercially reasonable prices from its former project partners, the North Slope’s major energy companies.

The state has offered little evidence to show why this approach might succeed, he wrote. Any effort to commercialize North Slope gas will require “serendipity,” an aligning of numerous elements, he said.

Legislators were scheduled to hear a project update Monday.

Rosetta Alcantra, a spokeswoman for the Alaska Gasline Development Corp., said Tsafos’ company didn’t contact the corporation in compiling the review. The state-sponsored corporation has become the project lead.

“It doesn’t help us, I’ll just say that, but it doesn’t deter from our motivation as Alaskans to demonstrate that, yes, we can do this,” she said of the report.

It’s the latest iteration of a long-hoped-for gas project taking shape after a market shift, an inability to get the costs down enough and hesitance among the North Slope companies to move to the next phase, Tsafos wrote.

The governor said in his State of the State speech last week that Alaska is proceeding with an eye toward projected gas prices for 2023 to 2025, seeing that as a window of opportunity.

The state opened an office in Tokyo to help promote trade and advance a natural gas pipeline project.

“We have no other project that will revitalize our economy the way the gas line will,” Walker said to applause.

He vowed the project only will be pursued if it has long-term customers and not “at all costs.”

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