Alaska Gasline Development Corporation signed a deal with UK-based energy giant BP to collaborate in the development of the financial and tolling structure intended to advance the Alaska gasline and LNG project.
The deal would assist in developing a commercial structure of the LNG project to enable financing, AGDC said in a statement, adding that BP would contribute staff, resources, and selection of third-party contractors.
The objectives of the deal are to “progress the effort to utilize third-party infrastructure funding sources as a means to reduce the cost of service on the Alaska LNG project infrastructure, as well as to refine the understanding of tolling structures to identify a viable and competitive structure for Alaska or identify alternative structures that may be viable.”
The two companies also agreed to map out an agreement framework & phasing required to successfully execute and operate the project, and BP has agreed to assist AGDC in developing the project on an “expeditious timeline within AGDC’s target in-service date of 2023-25.”
BP and AGDC said they plan to identify likely funding sources for FEED and confirm the need for new equity investors, introduce a common language for discussing risk allocation in the commercial structure, and identify possible long-term financing structures to reduce project cost of supply.
To remind, earlier this month, AGDC took over the leadership position in the Alaska LNG project.
The Alaska LNG project proposed facilities include a liquefaction facility in the Nikiski area on the Kenai Peninsula, an 800-mile large diameter pipeline, up to eight compression stations, at least five take-off points for in-state gas delivery, a gas treatment plant located on the North Slope and transmission lines to transport gas from Prudhoe Bay and Point Thomson to the gas treatment plant.
The project is designed to export up to 20 million metric tons of liquefied natural gas per year, and according to the AGDC’s timetable, if the project keeps progressing according to plans, FEED work could begin in 2018 with construction kicking off in 2019.