Supermajors to the rescue for AKLNG? Mining rocks for Alaska!

In Home, News by wp_sysadmin

Supermajors Set Out To Save Alaska LNG
Tim Daiss,, March 28, 2019

Technical teams from the Alaska Gasline Development Corp. (AGDC) and supermajors BP and ExxonMobil will meet next week in Houston to begin a review of the proposed $43 billion Alaska LNG project in an effort to find potential cost reductions so the massive capex project can move forward, Tim Fitzpatrick, an AGDC spokesman said on Tuesday. Discussions will begin on April 2 and last for most of the month, he said, adding that about “25 technical folks from ExxonMobil, BP and AGDC will meet in Houston on the cost reduction workshop.”

Our Take: The return of the private sector to the project will make a big difference in how the state legislature and the public view the legitimacy of the project. A very good move by the Dunleavy administration.

US LNG sector on track for a big year ahead
Caroline Evans, Upstream, March 28, 2019

THIS year is bound to be a red-letter one for the US liquefied natural gas industry, which is expected to see an unprecedented number of final investment decisions and a big production boost as more export facilities come online. The US Energy Information Administration (EIA) projects US LNG export capacity will reach 8.9 billion cubic feet per day by the end of 2019, more than double the level at the end of 2018. The increase would make the nation the third-largest LNG exporter in the world, behind Australia and Qatar.

Infected U.S. Shale Oil Is Being Turned Away by Asian Buyers
Serene Cheon, Sharon Cho & Alfred Cang, Bloomberg, March 27, 2019

The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia — the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce. Two refiners in South Korea — the top buyer of U.S. seaborne supply — have rejected cargoes in recent months due to contamination that makes processing difficult.

Our Take: A trend worth watching for Alaska. Shale is a tough competitor for us.

From our friends at the Alaska Miners Association:

Court rules in favor of NEPA process at Palmer Project – A federal court recently ruled that BLM does not have to consider future impacts of mining development when considering exploration plan of operations applications. This stems from a 2016 plan to expand exploration activity at the Palmer Project in which BLM approved; upon which environmental groups and the Chilkat Indian Village of Klukwan sued. The Southeast Alaska Conservation Council (SEACC), Lynn Canal Conservation, and Rivers Without Borders complaint alleged that issuance of an Environmental Assessment supporting construction of the mineral exploration road in 2016 violated NEPA because they failed to describe the environmental impacts. Judge Burgess disagreed, ruling that mineral exploration and development are not “inextricably intertwined” because mineral exploration does not always lead to development. Therefore, it is inappropriate from BLM to review potential future impacts from development before approving exploration plans.

Our Take: Good news! The benefits of mining to Alaska should never be underestimated.

  • $120m in government revenue in 2017 and $48.4m to municipalities through fees, rents, sales, royalties and taxes
  • 3,392 full-time jobs in 2017, up 5% from 2016
  • Average wage for these jobs? $107,820, more than twice the average private-sector wages
  • The Alaska Permanent Fund earned $5.2m from the mining industry in 2017
  • Mining companies purchased $580m of goods and services from Alaska vendors in 2016
  • The mining industry paid $276.5m in royalty payments to Native Corporations in 2017
  • More than $2.9m in charitable donations was given to Alaska communities by the mining industry in 2017