Alaska LNG secures ConocoPhillips gas supply agreement

The LNG liquefaction facility, located in Nikiski, will process, store, and transport up to 20 million tons of LNG per year. (Image: Alaska LNG)

Glenfarne Group subsidiary ConocoPhillips Alaska have signed a gas sales precedent agreement to supply North Slope natural gas for Phase One of the Alaska LNG project, marking another step forward for the long-delayed development.

Under the 30-year agreement, ConocoPhillips will provide natural gas volumes intended to support the first phase of the project, which centers on construction of a large-diameter pipeline to deliver gas to Alaska consumers. Glenfarne said the agreement means Alaska LNG has now secured sufficient precedent agreements to support a potential final investment decision for Phase One.

The company is developing Alaska LNG in two financially independent phases in an effort to accelerate execution and reduce commercial complexity. Phase One includes a 739-mile, 42-inch pipeline designed to transport North Slope gas to Alaskan markets as Cook Inlet production continues to decline. Phase Two would add LNG export facilities in Nikiski.

Glenfarne said the project now has agreements in place with all three major North Slope producers, including ExxonMobil, Hilcorp Alaska and Great Bear Pantheon LLC, a subsidiary of Pantheon Resources.

Adam Prestidge, president of Glenfarne Alaska LNG, said the agreement establishes the commercial framework for ConocoPhillips to supply gas into the first phase of the project while supporting long-term energy security in the state.

“Today’s milestone agreement establishes the commercial terms for ConocoPhillips to supply gas and help Phase One of Alaska LNG provide energy security for Alaska,” Prestidge said.

ConocoPhillips Alaska President Erec Isaacson said the company views participation in Alaska LNG as consistent with its broader investment strategy in the state.

“ConocoPhillips shares Glenfarne’s commitment to developing Alaska’s resources for the long-term benefit of Alaskans,” Isaacson said. “Our participation in Alaska LNG supports reliable access to responsibly produced North Slope natural gas while complementing our ongoing investment in Alaska.”

According to Glenfarne, the full Alaska LNG development would include an 807-mile, 42-inch pipeline system capable of delivering gas to domestic users while supporting exports of up to 20 million tonnes per annum of LNG.

The project has long been viewed as one of North America’s largest proposed LNG developments, though its scale, cost and remote location have historically posed financing and commercialization challenges. Glenfarne currently owns 75% of the project, while the State of Alaska, through the Alaska Gasline Development Corp., owns the remaining 25%.