Alaska
Alaska LNG Secures Preliminary Gas Supply Agreement
Alaska Gasline Development Corp. (AGDC) has signed a preliminary agreement to source gas from Pantheon Resources PLC for Alaska LNG, a federally authorized project to export up to 20 million metric tons of liquefied natural gas (LNG) per year.
The so-called gas sales precedent agreement (GSPA) contains main terms that would be contained in a future binding GSA between AGDC and London-based Pantheon, including the supply of up to 500 million cubic feet per day (MMcfpd) to the liquefaction project for an extendable 20 years.
The GSPA also set the maximum base price for the feed gas at $1 per million British thermal unit in 2024 dollars, AGDC and Pantheon said in a joint statement. The GSPA was signed between AGDC subsidiary 8 Star Alaska LLC and Pantheon subsidiary Great Bear Pantheon LLC.
In Alaska, Pantheon plans to develop two field discoveries, Ahpun and Kodiak, which sit onshore state land in the North Slope. Kodiak has been independently certified to contain 5.4 trillion cubic feet of gas and 1.2 billion barrels of marketable liquids, in the best-estimate scenario for contingent recoverable resources, according to a Pantheon statement April 9. Pantheon is still working on a resource estimate for Ahpun.
The signing of a GSA in the future is conditional on Pantheon reaching affirmative final investment decisions (FID) on these upstream projects, as well as AGDC making an FID for Alaska LNG. AGDC plans to reach an FID mid-2025. Pantheon also needs permits and regulatory approvals to deliver gas for Alaska LNG.
Alaska LNG, which received export authorization from the Energy Department last year, is pursuing a phased development to make it attractive to investors. The GSPA is part of phase one.
“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”, the joint statement said.
AGDC president Frank Richards commented, “This agreement solidifies the commercial foundation needed for the Phase 1 portion of Alaska LNG and provides enough pipeline-ready natural gas, at beneficial consumer rates, to resolve Southcentral Alaska’s looming energy shortage as soon as 2029”.
“Phasing Alaska LNG by leading with the construction of the pipeline will make Alaska LNG’s export components more attractive to LNG developers and investors, and this agreement will help unlock the project’s substantial economic, environmental, and energy security benefits for international markets as well as for Alaska”, Richards added.
AGDC is in talks with potential partners for the construction of the 807-mile pipeline from the North Slope to Southcentral Alaska. Alaska LNG is planned to deliver up to 3.3 billion cubic feet of gas per day from the North Slope to overseas markets, according to AGDC.
“AGDC is continuing advanced discussions with an established North American pipeline developer and Alaska utilities to complete the commercial structure that will make a natural gas pipeline from the North Slope to Southcentral Alaska possible and further enhance the prospects for the overall Alaska LNG export project”, AGDC spokesperson Tim Fitzpatrick told Rigzone.
Gas Price Adjustment
To lessen the upstream cost burden on Pantheon, the GSPA allows the base price of the gas that Pantheon would supply Alaska LNG to be reduced if state authorities lower financing repayment costs “and/or enable other commercial opportunities”, the joint statement said.
“Furthermore, securing financing for Phase 1 of Alaska LNG could potentially increase commercial alignment for the complete project and thus potentially provide additional demand for Pantheon’s associated natural gas above the initial 500 mmcfd plateau”, the statement added.
“The GSPA potentially opens up additional funding pathways for the Alaska LNG Project and the Ahpun field development activities. This may relieve Pantheon of the need for equity dilution following FID, in line with the Company’s guidance to secure the path of least value dilution for existing shareholders”.
Court Battle
While the GSPA marked a milestone, a suit has been filed by environmental watchdogs, taking issue with the route of the pipeline.
The Center for Biological Diversity and Sierra Club on May 30 sued federal fisheries authorities alleging that their biological opinions had failed to fully examine the harms posed by Alaska LNG to wildlife species.
The petition for review filed before the United States Court of Appeals for the Ninth Circuit seeks to throw out the opinions of the Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NOAA Fisheries). The opinions issued by the fisheries authorities “violate the Endangered Species Act by not fully examining and mitigating the project’s harms to polar bears, Cook Inlet beluga whales and North Pacific right whales”, the plaintiffs said in a joint statement.
“The pipeline would connect drilling operations on the North Slope to an export terminal on Cook Inlet and bring tanker ships through the habitat of endangered Cook Inlet beluga whales and North Pacific right whales”, the Center for Biological Diversity and Sierra Club said in their statement. “The Federal Energy Regulatory Commission estimates the project would increase large vessel traffic in the inlet by up to nearly 75 percent.
“Cook Inlet beluga whales are critically endangered. The population has declined more than 75 percent since 1970, and scientists believe their recovery is hindered by noise pollution and the cumulative harm of multiple, human-caused stressors.
“The eastern North Pacific right whale population ranges from the Bering Sea to Baja California and is down to only about 30 individuals. With few reproducing females, the population is at extreme risk of imminent extinction”.
Named as defendants are the FWS; Interior Secretary Deb Haaland, whose department oversees the FWS; NOAA Fisheries; and Commerce Secretary Gina Raimondo, whose department oversees NOAA Fisheries.
AGDC rejected the suit’s claims. “Alaska LNG has withstood intensive environmental scrutiny by two successive administrations because of its obvious and abundant benefits, which include reducing global emissions by up to 2.3 billion tons, strengthening allied energy security, and finally ending longstanding air quality problems plaguing Interior Alaska villages and communities”, Fitzpatrick said in a statement to Rigzone.
The Interior Department and the FWS declined to comment. NOAA Fisheries said it could not comment on litigations.
To contact the author, email jov.onsat@rigzone.com
Two US soldiers were wounded by a brown bear during a training exercise in Alaska on Thursday, the US Army stated.
Anchorage Daily News reported that the soldiers were from the 11th Airborne Division, and that the exercise had been a “land navigation training event” near Joint Base Elmendorf-Richardson.
State wildlife officials said that the bear attack seemed to be a defensive one, from a bear which had recently emerged from its den. Staff members from the Alaska Department of Fish and Game collected evidence at the scene in an attempt to learn more about the bear, such as its species and gender.
“The incident is currently under investigation, and we are working closely with installation authorities and local wildlife officials to gather all relevant information and ensure the safety of all personnel in the area,” the 11th Airborne Division said in a statement, reported ABC News.
ABC News also cited an 11th Airborne Division spokesperson, Lt.-Col. Jo Nederhoed, who said that the two soldiers had been seriously wounded, but were receiving care at a hospital in Anchorage, and had shown improvement by Saturday morning.
“We hope both individuals have a full and quick recovery, and our thoughts are with them during this time,” Fish and Game Regional Supervisor Cyndi Wardlow said in a statement reported by Anchorage Daily News. “In this case, having bear spray with them in the field may have saved their lives.”
Both of the soldiers reportedly had and used bear spray during the attack.
The bear’s condition and whereabouts are currently unknown.
Up, up and away … that’s where most travel prices are going.
It’s true. Not only are our nation’s geopolitical thrusts in the Mideast affecting the cost of your fill-ups, every component of your trip from airfares to car rentals and hotel stays are subject to price hikes.
Imagine filling up a jetliner with jet fuel that’s doubled in price. It’s enough to melt your credit card, regardless of the number of points you get for every dollar spent!
Because the price of oil affects everything, higher prices are eating away at your travel budget in many ways.
Bag fees
There’s lots of press on this. All airlines are increasing their checked-bag fees because of the jump in fuel prices.
Back in 2009, Alaska Airlines instituted a $15 fee for the first checked bag and $25 for the second bag. At the time, there was no charge for the first bag and a second bag was $25.
Last week, Alaska Airlines, along with other major airlines, increased its fees to $45 for the first checked bag and $55 for the second bag. Delta Air Lines charges the same.
Even if the cost of oil comes down, I don’t expect bag fees will ever be reduced.
Travelers who live in Alaska are somewhat insulated from the new hikes because both Delta and Alaska Airlines offer two free checked bags, with conditions:
1. Alaska offers two free checked bags for travelers flying to or from Alaska who are enrolled in Club 49. This does not affect other flights on Alaska. Separately, ATMOS credit card holders can get a free checked bag. Also, elite members of the ATMOS scheme get one or two free checked bags systemwide.
2. Delta offers two free checked bags for travelers flying to or from Alaska who are SkyMiles members who live in Alaska. Again, this does not apply to other Delta flights. Separately, Delta American Express cardholders can get a free checked bag.
3. Elite-level travelers with the oneworld airline cartel, including Alaska Airlines, can get one or two checked bags on American, British Airways, Japan Airlines, Qantas or other oneworld carriers.
[Anchorage’s international airport rolls out self-driving wheelchairs]
Main Cabin vs. Basic Economy
The spread between the lowest available price, Basic Economy, and a more flexible ticket, Main Cabin, has increased. While the difference used to be $20-$30 each way when the Basic Economy scheme was introduced in 2018, the round-trip upcharge now can exceed $100.
For example, the lowest Basic fare to Portland is $337 round-trip on Alaska Airlines. The upcharge to Main Cabin, with full loyalty points, pre-assigned seats and more flexibility on changes and cancellations, is $447, a 33% upcharge.
This trend is not specifically attributable to the new Iran War. It’s just a cost that continues to rise.
New fees
I’m impressed at the creativity of airline people who dream up new fees. Here are some of my favorites from Alaska Airlines:
1. Phone reservations: $15
2. Partner award booking fee: $12.50
3. Pet travel fee: $100 in the cabin, $200 in the baggage compartment with a kennel
4. Left on board item return fee: $20
On Condor Airlines, operating the only nonstop service from Anchorage to Europe, travelers can choose from four different bundles in economy class. The least-expensive, Economy Zero, from $840 round-trip, features fees for travelers:
1. Carry-on bag fee, up to 8kg: $35; a small bag like a purse always is included for free
2. Checked bag: $75
3. Airport check-in: $30
All three of these fees are included in the next-highest fare bucket, Economy Classic, from $900 round-trip. It’s cheaper to buy the bundle than it is to buy the components a la carte. Seat assignments are additional, from $25 for economy.
Airfares on the rise
There are a few good deals available for travel to select West Coast/Intermountain destinations in May, including:
1. Anchorage-San Francisco on Alaska Airlines, from $307 round-trip. Fly May 15-28 only. Add $90 round-trip for Main cabin.
2. Anchorage-Los Angeles on Alaska Airlines, from $317 round-trip. May 15-25 only. Add $90 round-trip for Main.
3. Anchorage-Phoenix on United, Delta or Alaska, from $267-$287 round-trip. Fly May 8-June 9 only. Add $90-$100 for Main.
4. Anchorage-Denver $357 round-trip on Delta. Fly May 8-June 9 only. Add $90 round-trip for Main.
For travel to other destinations, or later in the summer, be prepared to pay more.
Flying to Hawaii? Alaska Air’s nonstop prices out at $706 round-trip between May 30 and June 6. Add $110 round-trip for Main.
Nonstop flights from Anchorage to Salt Lake City start at $669 round-trip with Delta on May 17. That’s $100 more than the cost for the same flights last month. Add $90 more for Main.
Hotel costs continue to rise, accompanied by pesky resort fees.
The Outrigger on the Beach in Waikiki is a very nice beachfront hotel. It’s not plush, or the nicest property. But it’s solid. The cost is $334 per night.
But there’s more: a $50 per night resort fee, plus a variety of taxes and charges, totaling $112.55 per night.
Down in Seattle, the Sound Hotel in the Belltown neighborhood is marketed by Hilton. The discounted rate for “Honors” members — it’s free to join — is $313.34 per night for a king room in late May. Taxes and fees add an extra $56.40 per night.
There’s no appreciable bump yet for hotel rates as a result of the oil price surge. Yet. But if these hotel rates seem high, they’re in line with hotel rates in Anchorage this summer. At the Sheraton in Anchorage in June, it’s $450 per night, plus $54 in taxes and fees, when booked at Expedia.
Car rentals are not cheap
My go-to site for car rentals is the Costco site, which compares major brands and automatically includes Costco discounts.
In Las Vegas, for a one-day rental in May, Budget charges $67 per day, which includes taxes and fees of $22.77. In Anchorage, the same kind of car, medium SUV, costs $92.97 with Alamo.
The biggest differences so far in car rental rates seems to be the bill you’ll pay when you fill up the tank before returning. There’s no appreciable jump in prices because of the new war.
When it comes to making travel arrangements for the spring and summer, it’s more risky making completely non-refundable arrangements.
I made the decision to purchase most of my summer travel plans in advance, but only after determining I would not need to change the dates. Particularly with airline tickets, it’s expensive to change your dates.
There’s lots of uncertainty regarding travel arrangements, particularly international travel. As fuel prices go up due to oil shortages, travel companies will look for ways to recoup the increased costs. In most cases, those higher costs will be borne by travelers.
ANCHORAGE, Alaska (KTUU) – The reopening of the Strait of Hormuz has led to a decrease in oil prices nationally, but Alaska’s senior senator said the state faces a different situation that could threaten rural communities.
“If you can’t produce power because you don’t have the diesel or you just can’t pay the prices, your little communities can collapse,” Sen. Lisa Murkowski, R-Alaska, said at a Friday press conference at the Arctic Encounter Summit in Anchorage.
The price of oil has been a double-edged sword for Alaska. On one hand, the increased price of North Slope oil brings more revenue to the state, but consumer prices can also rise.
North Slope oil prices were $106.36 a barrel on Thursday.
“This is a very precarious time,” Murkowski said. “Our state has enjoyed a bounty because we have benefited from the higher prices of oil that goes into our treasury, but it’s the Alaskans in … the off-road communities that are threatened to be hit most hard.”
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