October 7, 2013

The possibility of an LNG pipeline in Alaska

According to industry leaders, a natural gas pipeline from North Slope to South Central Alaska would benefit interests in Alaska and worldwide.

According to industry leaders, a natural gas pipeline from North Slope, Alaska, to the South Central region of the state would benefit interests in Alaska and worldwide.

“The natural gas industry around the world has changed in the last several years with shale gas in North America with increasing demand in Japan,” said Larry Persily, the federal coordinator for Alaska Natural Gas.

Transporting gas from the North Slope to consumers has been a procedure regulated by demand in the past. A decreased demand from the lower 48 states meant an LNG pipeline would be relatively impractical, though now with increased domestic and international demand it may be a wise decision. It would also benefit Alaskans, who believe it could lower high energy costs.

Plans in the works

At an oil and gas industry conference recently held in Anchorage, three plans for such a pipeline were laid out for the inspection of industry leaders. There were no firm decisions or conclusions, but leaders say there may be enough demand to make investment in a pipeline a sensible choice. It could also make Alaska a major player in supplying natural gas.

“You have to be competitive because there are a lot of other suppliers out there; British Columbia is looking at becoming a supplier, the U.S. Gulf coast, Russia, East Africa,” Persily said. “This just comes down to price.”

An LNG pipeline could allow Alaska to compete in the international market by lowering the overall price of exporting natural gas. Currently, transportation costs increase the price of natural gas from Alaska even to the state's own residents.

Unlike industry leaders, the Alaska Legislature has taken action on this issue. It has asked Dan Fauske, head of the Alaska Gasline Development Corp., to plan, develop and implement a 737-mile, small-diameter natural gas pipeline from the North Slope to some point in South Central Alaska. There is resounding support for this project for the reasons outlined above.

Technology and the LNG industry

The renaissance in production of, and demand for, LNG in the U.S. is enabled by precision equipment. Just as an LNG pipeline could revolutionize the Alaskan energy industry, the technology behind fracking has made the U.S. a major player in the LNG market. Companies now offer such advanced options as custom gearbox design to make fracking as efficient as possible. Others create industrial weldments that can stand up to the conditions in locations as extreme as North Slope, Alaska.

An LNG pipeline in the state would only be the latest in a long line of technical advances that have revolutionized the LNG industry in the U.S.