Alaska Gasline Development Corporation (AGDC) has announced an updated $38.7 billion cost estimate for the Alaska liquefied natural gas (LNG) project. The company says the $5.5 billion (12.4%) cost reduction will increase the project’s ability to deliver natural gas to Alaskans and LNG to export markets at competitive prices. AGDC obtained federal authorization to construct and operate the Alaska LNG project on May 21, 2020.
The announcement at the AGDC board meeting followed a 14-month process incorporating what the company describes as significant third-party LNG industry expertise. Along with AGDC staff, participants included representatives from BP, ExxonMobil, and Fluor Corporation, an international engineering, procurement, construction and maintenance company.
The Alaska LNG project’s cost reductions reflect the advances in the LNG industry over the past several years in the areas of gas liquefaction technology and modular construction techniques, allowing for lower engineering costs and a streamlined project management team. The company says the cost estimate validates the efficiency of the Alaska LNG project’s design and major components, including a North Slope gas treatment plant, an 800-mile pipeline, and a Nikiski LNG plant.
“These updates improve the competitive position of the Alaska LNG project and its ability to deliver LNG and natural gas at favorable prices. We are incorporating these results into our discussions with potential partners as we work to transition to a new market-led project team and maximize project benefits for the State of Alaska,” said AGDC president Frank Richards.