Alaska's giant LNG project took another step forward Friday, with participants submitting a formal request to the Federal Energy Regulatory Commission to pave the way for an environmental review required for federal approval of the project.
The request was called a "major milestone" in a press release sent by project lead ExxonMobil. The regulatory agency approves LNG terminals and will coordinate various government entities in the project.
Such coordination will be critical for a project that will be the largest ever permitted under the National Environmental Policy Act, said Steve Butt, Alaska LNG's senior project manager and an ExxonMobil employee.
"This is TAPS plus a very large treatment facility plus a very large LNG plant," said Butt, referring to the trans-Alaska pipeline system that moves North Slope oil to Valdez.
The $45 billion to $65 billion project proposes sending the North Slope's natural gas down an 800-mile, large-diameter pipeline to a plant in Nikiski on Alaska's Kenai Peninsula, where it will be super-chilled into a liquid for shipment overseas to Asia.
Project participants are BP, ConocoPhillips, ExxonMobil, TransCanada and the state, which has a 25 percent stake in the project. The project also includes off-take points so natural gas can be delivered elsewhere in Alaska.
A timeline laid out in the newly filed request says the companies will file for FERC approval in September 2016, and will request approval be granted by July 2018.
The timeline also anticipates that a draft environmental statement will be issued three years from now, before a final impact statement is issued in early 2018. Construction would begin later that year or in 2019, and gas would begin flowing not later than 2025.
The request before FERC said this required phase will facilitate communication between the project organizers and the multiple agencies that will be involved in permitting.
"This is more than a baby step, but I wouldn't call it full-fledged adulthood either," said Larry Persily, the federal pipeline coordinator for the project.
It will help smooth the process at the federal level as environmental information is assembled into numerous reports required for environmental review. "It's in everyone's best interest to work together on such a complex application, so when you turn it in, it's complete," Persily said.
The formal request is another sign of progress on the project, said a statement from Gov. Sean Parnell's office. Parnell also announced that the state had signed a memorandum of cooperation with Japan's Ministry of Economy, Trade and Industry on Monday, with the intent that the two sides would strengthen economic ties and share information and views on the project that could supply Japan with LNG.
"It is an extremely positive development that the government agency that sets Japan's energy policy and works closely with Japan's utility market has taken a strong interest in the Alaska LNG project and the state's overall natural resources portfolio," Joe Balash, commissioner of natural resources, said.
Efforts to sell the North Slope's massive reserves of natural gas have dragged on for decades, with a variety of energy companies and governors leading the way.
Useful information gathered from several past projects will be incorporated into the current project, the formal request from Alaska LNG notes.
Earlier this summer, the participants inked a contract to launch the 18-month, $500 million process to gather preliminary engineering and environmental data. The oil companies also applied to the Department of Energy for permission to export the gas.
The final investment decision would not come until the Energy Department and the Federal Energy Regulatory Commission approve construction and export.
About 250 people were involved in field work this summer, said the Alaska LNG statement. Their attention focused on the pipeline route from Livengood, north of Fairbanks, to Nikiski on the Kenai Peninsula. Field work will continue next summer. After that, participants will have to decide if they'll enter a costlier phase known as front-end engineering and design. That effort could cost up to $2 billion in early 2016.
Butt, the senior project manager, said some Alaskans are skeptical when they consider the long history of projects that were never built. There are key differences with this one, including that Alaskans would be partial owners.
The project sponsors have held meetings with Alaskans across the state and those will continue. "It's important to help Alaskans understand they're owners of this project," he said.