The Alaska Gasline Development Corp (AGDC) has released an updated $38.7bn cost estimate for the Alaska LNG Project, which is $5.5bn lower than the earlier figure of $44.2bn.
The latest move comes as the development faces market uncertainty due to weak oil prices as a result of the Covid-19 pandemic.
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The Alaska LNG Project is a proposed liquefied natural gas (LNG) export project to be constructed in Nikiski, an industrial town located on Alaska’s Kenai Peninsula, south-west of Anchorage.
It will include the construction of an LNG plant, storage and shipping terminal, an 800-mile (1,287km) long pipeline from the North Slope to the LNG facility.
The pipeline would be capable of moving 3.5 billion cubic feet (bcf) of gas a day.
ExxonMobil, ConocoPhillips, BP, TransCanada, and the state of Alaska, which is represented by the Department of Natural Resources, Department of Revenue and the AGDC, are sponsoring the project.
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By GlobalDataLast month, AGDC received federal authorisation for constructing and operating the Alaska LNG project.
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 favorable 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.”
In May 2018, BP Alaska agreed to supply gas to the Alaska LNG project, which is expected to deliver around 3.5 billion cubic feet of gas per day.
