AGDC inks framework deal with energy firm to develop Alaska LNG project

(AIDEA) has approved a resolution to negotiate a letter of credit with AGDC to backstop the FEED costs on Alaska LNG Phase 1, the in-state pipeline portion of Alaska LNG.

This resolution brings Alaska a “critical step” closer toward a privately funded in-state natural gas pipeline, it said.

According to AGDC, the letter of credit will allow the company to unlock up to $50 million in private investment needed to move the Alaska LNG pipeline through FEED, the remaining development stage that must be completed before a final investment decision can be made.

AGDC said at the time it is in “advanced discussions” with potential project partners to privately fund and complete FEED.

LNG project

Alaska LNG is a federally authorized integrated natural gas and LNG export project under development to deliver natural gas within Alaska and export up to 20 million tonnes per annum of LNG.

The facility would have three LNG trains, two 240,000-cbm storage tanks, and two jetties to accommodate LNG carriers up to 217,000 cbm.

AGDC received all major federal permits and authorizations for Alaska LNG. It secured an approval from the US FERC back in May 2020 to construct the project.

The company previously said that it is pursuing an option to phase Alaska LNG by prioritizing the in-state pipeline portion of Alaska LNG consisting of the 42-inch pipeline from the North Slope to Southcentral Alaska to provide natural gas to avert the looming energy crisis facing the region.

Phase 1 of Alaska LNG does not involve construction of an LNG plant, and as a result has a materially lower capex requirement and construction timeframe, allowing gas transportation as early as 2029, it said.

In June 2024, AGDC and a unit of London-based Pantheon Resources signed a gas sales precedent agreement, which includes, among other conditions, a requirement for the Alaska LNG project to reach FID.