The new Alaska-based company Qilak LNG revealed plans to ship natural gas from the North Slope field to Asian markets, under a proposed Alaska North Slope LNG export project (Qilak LNG 1 Project). To this end, the company announced a Heads of Agreement (HOA) with ExxonMobil Alaska Production to ship LNG from Point Thomson.
The Qilak LNG 1 Project seeks to capitalize on recent developments in Arctic LNG technology allowing natural gas to be directly exported from the North Slope of Alaska.
This concept would reduce the capital cost compared to projects that require a long-distance pipeline and a large minimum LNG order.
The Qilak LNG 1 Project would deliver on Alaska’s long-held goal of commercializing North Slope natural gas. With this HOA and our recently completed pre-feasibility study, Qilak will now begin extensive feasibility efforts, including preliminary permitting, with a target of reaching Final Investment Decision (FID) by 2021,
…said former Alaska Lt. Governor Mead Treadwell, Chairman and CEO of Qilak LNG.
The agreement foresees ExxonMobil providing at least 560 million standard cubic feet per day of natural gas to Phase 1 of the Qilak LNG 1 Project, based on the design concept of offshore liquefaction and loading, and icebreaking LNG carriers, to export 4 million tons per year (MTPA) of LNG over a 20-year term.
Phase 1 of the Qilak LNG 1 Project would have an export capacity of 4 MTPA, with the option for additional capacity to come online in future phases as determined by gas supply and global demand.
Qilak LNG targets delivery of gas to Asian markets, including Japan.
ExxonMobil sees the development of the Qilak LNG 1 Project as an opportunity to develop Alaska’s gas resources,
…said Darlene Gates, President of ExxonMobil Alaska.
Qilak LNG 1 is to be supported by Japan’s Bank for International Cooperation (JBIC), as it helps fulfill Japan’s commitment to bring new LNG supplies to Indo-Pacific region.
Qilak LNG’s announcement comes after an examination of the technical challenges of shipping directly from a facility offshore in the Beaufort Sea.
Based on this process, Qilak LNG concluded that with available gas supply, competitive project economics, and a partner willing to utilize Alaska’s gas for power and city gas use in Asia, the Qilak LNG 1 project can be economically and technically viable.
According to US EIA in late 2018, the US LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making the country the third largest in the world behind Australia and Qatar.