Dubai-Based Firm Proposes LNG Plant Off Alaska's North Slope

Dubai-based floating LNG company Lloyds Energy has announced plans to export liquefied natural gas from Alaska's North Slope using an offshore liquefaction terminal and icebreaking LNG carriers. The proposal would eliminate the need for a $40 billion pipeline to carry gas 800 miles overland to a liquefaction plant at Cook Inlet - a persistent cost and permitting obstacle for North Slope gas development. 

Lloyds Energy's proposal, dubbed Qilak LNG, calls for a much simpler infrastructure footprint. Onshore, it includes a new gas treatment plant at ExxonMobil's Point Thomson gas prospect, located 60 miles east of Prudhoe Bay. The purified natural gas would be piped six to 10 miles offshore to a gravity-based structure LNG liquefaction terminal, which would have a capacity of four million tonnes per annum. Since the water at the site is deep enough for an LNG carrier, no dredging would be required.  Icebreaking LNG carriers would be chartered to load and deliver the fuel to Asian markets. Backers say that it is conceptually similar to Novatek's Arctic LNG 2 development plan, which calls for LNG liquefaction trains pre-assembled on gravity-based structures.

The $5 billion project is still in the planning phase, but its outline is quickly taking shape. Qilak LNG has secured a conceptual agreement with ExxonMobil for the supply of natural gas from the eight trillion cubic foot Point Thompson field for a period of 20 years. The gas is currently a stranded asset: ExxonMobil brought Point Thomson online in 2016 with production facilities designed to produce and then reinject 200 million cubic feet per day of gas, as there are no existing options for transporting it to market. The condensate is extracted and exported via the Trans Alaska Pipeline, but the gas goes back into the reservoir. The existing facility represents a $4 billion investment. 

Lloyds Energy's Qilak LNG subsidiary is headed by former Alaska Lt. Gov. Mead Treadwell. "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," Treadwell said in a statement. "The Qilak LNG 1 Project would deliver on Alaska's long-held goal of commercializing North Slope natural gas."

If successful, startup could occur as early as 2025.