Alaska Gasline Port Authority Touts Interest in Pipeline to Valdez
FAIRBANKS — The Alaska Gasline Port Authority has gathered interest from six major Asian buyers for enough gas to fill half of a large-diameter pipeline to tidewater in Valdez.
In a Fairbanks news conference Wednesday, the authority said six potential buyers had filled out non-binding statements of interest in getting gas to Valdez totalling 2.8 billion cubic feet per day. The six are POSCO (South Korea), Korea East West Power, KOGAS (South Korea), GS Energy (South Korea), PTT International Co. Ltd. (Thailand) and PT PGN LNG Indonesia.
The statements were lumped together by AGPA and submitted to TransCanada and ExxonMobil, who are conducting a non-binding “solicitation of interest” to determine a potential pipeline’s route under the Alaska Gasline Inducement Act.
The solicitation closed Friday, and the results likely won’t be announced to protect commercial interests.
Bill Walker, general counsel for AGPA, said the public has a right to know that there is significant interest in a pipeline to Valdez.
“The point we’re trying to make is there’s market out there, there’s plenty of market out,” he said. “This is what would allow Alaska to benefit from low-cost energy. ... We are a state with a whole lot of resources and 624,000 people aren’t going to be enough to do this from a market standpoint.”
Walker took the opportunity to warn Alaskans that he believes the current AGIA process, which puts the final decision on a pipeline in the hands of the producers, doesn’t serve the best interest of Alaska. He said the state needs to make a large investment in the pipeline.
Kurt Gibson, the director of Alaska’s Gas Pipeline Project Office, defended the AGIA process, saying it maintained momentum on a large-diameter pipeline after plans for a line to the Lower 48 fell apart when prices plummeted.
“It was flexible enough to respond to economic conditions and because of that we are able to continue moving forward. If you think of a project this size, if you can get it rolling it’s very, very difficult to stop it,” he said.
He went on to say that the recently concluded solicitation of interest “has produced encouraging results, with respondents from both North America and Asia — a wide range of interested parties.”
He said the current process is asking buyers if they prefer a route to Valdez, Cook Inlet or through Canada, which will help decide the direction in the coming years.
Walker said he’s skeptical Alaska will see any meaningful development on a pipeline out of the big developers, each of whom are already involved in gas export projects elsewhere in the world. He argues that they have no interest in bringing Alaska gas to market because it’s the most competitive for Asia and would undermine other efforts.
“It’s wrong that we’re going to think that we’re going to have an alignment, it’s not going to happen, it’s only been 47 years and I don’t think the 48th year is going to be anything different,” he said.
Walker said he expects there will be an announcement for a line to Cook Inlet, and not to the exhaustively researched Valdez. Cook Inlet, he said, will give the producers plenty of things to slowly study, delaying a big line for a number of years.
“What’s really frustrating is that the market is going by,” he said. “It’s been 47 years and now they’re going to study a route.”
He said it’s up to the administration to take a stronger stance with producers and stand up for Alaska’s interests.
“When we can go out with a beat up briefcase and a worn-out pair of shoes and come back with 18.2 million tons of export, think of what you could do if you had some clout,” he said. “It’s rewarding yet so frustrating if the state administration stood up, but on the state level it doesn’t seem to happen.”