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Alaska LNG Project announces updated project construction cost

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LNG Industry,

The Alaska Gasline Development Corp (AGDC) has released an updated US$38.7 billion cost estimate for the Alaska LNG Project. The updated cost estimate was presented during AGDC’s recent board meeting.

The updated estimate reflects a US$5.5 billion (12.4%) cost reduction off the previous US$44.2 billion cost estimate, which was compiled in 2015 by the project’s previous joint venture leaders, which included BP Alaska, ExxonMobil Alaska, ConocoPhillips, and AGDC. The new estimate will enhance the competitive price of LNG from the Alaska LNG Project versus similar projects vying to serve major Asian markets. Long-term LNG demand is forecast to exceed available supply as consumers seek the environmental benefits of LNG over other energy sources.

The latest US$38.7 billion cost estimate was established during a rigorous, 14-month process incorporating significant third-party natural gas and LNG industry expertise. Along with AGDC staff, participants included representatives from BP, ExxonMobil, and Fluor Corp.

The Alaska LNG Project cost reductions capitalise on technology and process improvements developed in the LNG industry over the past several years, reflecting maturation of the LNG industry. These improvements include advancements in gas liquefaction technology and modular construction techniques, lower engineering costs, and a streamlined project management team.

AGDC President Frank Richards said, “These updates improve the competitive position of the Alaska LNG Project and its ability to deliver LNG and natural gas at favourable 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 maximise project benefits for the State of Alaska. While today’s results strengthen the case for developing this project, it will ultimately be the market that determines the best path forward.”

AGDC obtained federal authorisation to construct and operate the Alaska LNG project on 21 May 2020.

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