Nikiski top choice for LNG plant, terminal

The Alaska LNG project companies have selected Nikiski as the lead site for the proposed project’s plant and terminal location.

ExxonMobil, BP, ConocoPhillips and TransCanada considered more than 20 sites for the liquefied natural gas plant, and announced Nikiski as the top choice in a Monday press release.

The plant and terminal would receive gas, liquify and store it to be shipped as demanded.

Senior Project Manager Steve Butt said the Nikiski site was chosen because it is an existing industrial area with proximity to a gas grid, the environmental issues are manageable and the area has a strong history of successful small operations.

Constructing the terminus in Nikiski provides a pipeline route with an access opportunity to the North Slope through Fairbanks, the Mat-Su Borough, Anchorage and the Kenai Peninsula, a press release from the involved companies states.

Even though Nikiski is the top choice and the companies will focus on that, Butt said there are alternatives that will work.

“If for some reason we learn things about our lead site as we do more detailed technical analyses, we would go to one of our alternative sites,” he said.

The next step in the process is acquiring land to get an export permit and to do further testing at the Nikiski site to ensure its viability, Butt said.

The LNG project would need 600-800 acres to work and the companies are considering land south of the industrial area. There is more flat land and site flexibility in the Nikiski area than at other possible sites, Butt said.

Kenai Peninsula Borough Mayor Mike Navarre said the borough is going to work to ensure the Nikiski site is developed for the project.

“The borough has a great mapping system so it can help identify various landowners and things like that,” Navarre said “The borough does have some land assets in the area also. We may be able to use some of those to help meet land needs.”

Navarre hasn’t seen economic studies for specifics on the economic impact for the peninsula, but the impact would be “significant,” he said.

In a Monday press release following the project announcement, House Speaker Mike Chenault, R-Nikiski, said the route makes sense; the area has a history of supporting LNG exports.

“Clearly these world-class companies have thoroughly evaluated the pros and cons of possible terminuses, and I’m not surprised that they find the Kenai to be the best choice.”

The new facility would be completely separate from the existing ConocoPhillips facility, Butt said.

Much of the routing work between Pruhoe Bay and Livengood for the project has been completed, he said. Work will continue south of Livengood in 2014.

The agreed project includes a gas treatment plant on the North Slope; an 800-mile, 42-inch pipeline with eight possible compression stations and at lease five points for in-state delivery as well as the liquefaction plant and terminal. The project is estimated to cost from $45 billion to $65 billion and possibly more. According to the release, the companies are working to refine the concept of the project.

About 2.5 billion cubic feet of gas would be transported through the pipeline daily to the LNG plant. The plant would have a capacity for 15 to 18 million tons of LNG annually, according to the companies. 

Kaylee Osowski can be reached at