Q&A: A look at the pipeline project being pursued by Alaska

  • By Becky Bohrer
  • Saturday, October 31, 2015 8:13pm
  • News
FILE - In this Friday, Oct. 23, 2015 file photo, Alaska Gov. Bill Walker speaks to reporters on the eve of the start of a special legislative session in Juneau, Alaska. The Alaska Legislature is meeting in special session to consider buying out TransCanada Corp.'s position in a major liquefied natural gas project the state is pursuing with other partners. (AP Photo/Becky Bohrer, file)

FILE - In this Friday, Oct. 23, 2015 file photo, Alaska Gov. Bill Walker speaks to reporters on the eve of the start of a special legislative session in Juneau, Alaska. The Alaska Legislature is meeting in special session to consider buying out TransCanada Corp.'s position in a major liquefied natural gas project the state is pursuing with other partners. (AP Photo/Becky Bohrer, file)

JUNEAU — The Alaska Legislature is meeting in special session to consider buying out TransCanada Corp.’s position in a major liquefied natural gas project the state is pursuing with other partners. Here’s a look at the project and what’s at stake:

What is it?

The Alaska LNG Project is the latest attempt to develop natural gas on the state’s prodigious North Slope. As envisioned, it would be one of the largest projects of its kind, with an 800-mile pipeline and a gas treatment plant and transmission lines connecting to gas fields. It also would have a liquefaction plant and export terminal at Nikiski, about 170 miles from Anchorage.

Asia is the expected overseas market, though the project likely would include offtake points for gas for Alaskans.

Initial cost estimates are $45 billion to more than $65 billion.

While prior efforts to commercialize the state’s gas over decades have faltered, there are high hopes for this project. That’s partly because of the involvement of all three of the North Slope’s major producers and the importance to the state of another revenue stream as oil production declines.

Who is involved?

The project partners include BP, ConocoPhillips, Exxon Mobil Corp., TransCanada and the Alaska Gasline Development Corp., or AGDC.

AGDC is a state-sanctioned corporation, which would hold Alaska’s interest in the liquefaction facilities. Under the existing arrangement, TransCanada, a Calgary-based pipeline company, would hold Alaska’s interest in the pipeline and gas treatment plant.

Where does the project stand?

It’s in a preliminary stage, and a determination on whether to build it could be a few years away. But the state faces a year-end decision point on how or whether to continue its relationship with TransCanada.

TransCanada’s initial inclusion was billed as a way for Alaska to shoulder less of the upfront costs. But it also allowed the state and TransCanada a way out of a prior, failed effort to produce a gas line without a potentially messy fight.

What now?

Gov. Bill Walker has long had problems with the TransCanada arrangement, which predates his administration. The Republican-turned-independent argues a buyout would give the state a greater say in the project.

Regardless of whether the project succeeds, Alaska is obligated to pay TransCanada for costs it puts in on the state’s behalf, plus about 7 percent interest, a Walker administration consultant has said.

The administration is betting it can get financing cheaper elsewhere. The state could have to come up with about $7 billion to $8 billion more in upfront investment costs without TransCanada.

The administration says the state could get up to $400 million more a year when gas starts flowing without TransCanada in the picture.

What about lawmakers?

Legislative consultants say the financial case for keeping or shedding TransCanada is too close to be persuasive, given all the uncertainties at this early stage. They say the decision should focus on strategic considerations.

The state would owe TransCanada about $68 million if a buyout occurred.

TransCanada says it supports Walker’s recommendation to sever ties. It’s up to the Legislature to decide whether to approve money for the buyout and project-related costs that Walker is seeking, totaling about $158 million.

More in News

A map of the Johnson Tract Mine exploration project. Photo courtesy of the Center for Biological Diversity
Inletkeeper, partners file lawsuit against Cook Inlet gold mine

The Johnson Tract Mine is located on CIRI-owned lands inside Lake Clark National Park.

A sockeye salmon is carried from the waters of Cook Inlet on North Kenai Beach in Kenai, Alaska, during the first day of the Kenai River personal use dipnet fishery on Thursday, July 10, 2025. (Jake Dye/Peninsula Clarion)
Kenai River dipnet fishery open 24 hours beginning Friday night

Per fish counts available from the department, 471,000 sockeye have been counted so far this year — with 108,000 counted on Wednesday alone.

Attorneys Eric Derleth and Dan Strigle speak to Superior Court Judge Kelly Lawson during the opening arguments of State of Alaska v. Nathan Erfurth at the Kenai Courthouse in Kenai, Alaska, on Wednesday, July 16, 2025. (Jake Dye/Peninsula Clarion)
Opening arguments offered in Erfurth trial

The trial is set to continue for around two weeks, into early August.

Evacuees in Seward, Alaska, walk along Adams Street following a tsunami warning on Wednesday, July 16, 2025. (Photo by Jeff Helminiak/Peninsula Clarion)
Tsunami warning canceled following 7.3 earthquake near Sand Point

An all clear was issued for Kachemak Bay communities at 1:48 p.m. by the Kenai Peninsula Borough Office of Emergency Management.

The Ninilchik River on May 18, 2019, in Ninilchik, Alaska. (Photo by Michael Armstrong/Homer News)
Ninilchik River to remain closed to king salmon fishing

It was an “error in regulation” that would have opened the Ninilchik River to king salmon fishing on Wednesday.

A table used by parties to a case sits empty in Courtroom 4 of the Kenai Courthouse in Kenai, Alaska, on Wednesday, Dec. 11, 2024. (Jake Dye/Peninsula Clarion)
Nikiski woman sentenced to 4 years in prison for 2023 drug death

Lawana Barker was sentenced for her role in the 2023 death of Michael Rodgers.

Alaska State Troopers logo.
Seward resident arrested after Monday night police pursuit

Troopers say she led them on a high-speed chase on Kalifornsky Beach Road for around 7 miles.

Concert-goers listen to The Discopians at Concert on the Lawn on Saturday, July 12, 2025, at Karen Hornaday Park in Homer, Alaska. (Delcenia Cosman/Homer News)
‘Dancing at the end of the world’

KBBI AM 890 hosted their annual Concert on the Lawn Saturday.

Most Read