North Slope Producer Applies for LNG Export Licence

If you think this is good news for the Alaska gas line and LNG project you would be wrong.

The 4 BCF / 30 MTPA LNG project is being developed by WCC LNG, an entity owned by  Exxon Mobil and Imperial Oil Resources. The project will be built in the Kitimat and Prince Rupert area.

• LINK TO APPLICATION DOCUMENTS
• LINK TO APPLICATION

There's talk of an Alaska LNG project announcement soon (no later than 30 Jun 13).  That may just be wishful thinking -The WCC application has all but one of the ingredients needed for an Alaska LNG project, i.e. it's not in Alaska.

The project will be based on Canadian shale gas resources but may ultimately recieve gas from other sources:

The LNG Terminal will access gas primarily from the WCSB. Given the  ntegrated nature of the North American gas markets and pipeline network, gas supply could also potentially come from other Canadian or North American basins over the life of the LNG Terminal.

 So maybe some day an Alaska gas line to Canada may send gas to an export terminal in Canada. By someday I mean decades from now.

This news combined with the Petronas Canada LNG project announcement leads me to believe that Canada will export LNG before North Slope gas is exported.


The cost of the WCC project is not stated and the project is not approved yet.  This non-Alaska Exxon Mobil LNG terminal may become a powerful bargaining chip in negotiations with the State of Alaska.  Alaskans won't like that and I'll bet Exxon Mobil comes out the winner no matter which project goes forward.

The good news for Alaska, is that the Canadian upstream is not as developed as the North Slope upstream which means the unit cost of West Coast Canadian LNG may be within 10% of the cost of North Slope LNG exported from South Central Alaska - that 10% may offer room to negotiate.

Three & One

Yesterday Alaska's Governor Sean Parnell met with the CEO's of ExxonMobil, BP, and ConocoPhillips to talk about commercialization of North Slope gas, boosting Alaskan oil output and Point Thomson.(LINK to Governors press release), and the agenda:

It's not a kumbaya moment yet, but I'll give the Governor and the CEOs credit  for manning up and doing the adult thing, i.e. start talking about the issues that are stalling development of oil and gas in Alaska.  This group should talk more often.  Quote from the Governor:

“I appreciate the willingness of the chief executives to come to Alaska to discuss the important topic of commercializing North Slope gas,” Governor Parnell said. “For a gas project to advance, all three companies need to be aligned behind it. This meeting is an important step, but much work remains.”

Nice work Governor, don't let up.