By Jenny Neyman
There are a lot of questions about what would be the largest construction project in the state, and possibly the country — chief among them, whether it will come to fruition. But the beginning of another season of fieldwork on the Alaska LNG project will generate more information to start filling in those unknowns.
The project is in the Pre-FEED — Front End Engineering and Design — phase, where various studies and sampling are being conducted to see whether the concept dreamed up in 2013 is going to be feasible in the future. The project calls for a gas treatment plant on the North Slope, about 800 miles of pipeline to Nikiski with offtake points along the way to give Alaska communities access to gas, and a liquefaction plant, storage tanks and a marine terminal in Nikiski to ship the gas off to market.
Fieldwork began in 2013, continued in the spring, summer and fall of 2014 and according to Jeff Raun, downstream advisor for the LNG project at an open house in Niksiki last week, will be even busier this year.
Crews did 24 bore holes onshore and about 10,000 acres of fieldwork last year and expect to do around 80 bore holes and closer to 20,000 acres this year. They need to find out about soil conditions, subsurface stability and any potential underground hazards, such as boulders or buried manmade structures.
“These studies will help inform the placement and design associated with the major components of the facility — tanks, process equipment (etc.),” Raun said.
Testing is being done in Cook Inlet, as well, along the route the pipeline is expected to cross, from near Tyonek on the west side to Nikiski.
Several other environmental analyses are happening concurrently, adding to what will be, when all is tested and done, an exhaustive knowledge base of the ecology and seismography of the Nikiski area.
“Identification of wetlands, obtaining permits to do the work, nesting migratory birds, raptors, cultural resources. On the marine side we will have marine observers scanning the horizon for protected mammals and other species of interest,” Raun said.
Much of this work is expected to wrap up this year, though additional fieldwork could be done in 2016 to fill in any gaps or further investigate any abnormalities. All this data goes into 13 resource reports that are submitted to the Federal Energy Regulatory Commission. A first draft of the reports was submitted in February, a second draft will be sent next February, and the final reports are expected to be submitted in 2016 with the project’s official application.
Meanwhile, work on more logistical matters continues. Michael Nelson, Alaska LNG socioeconomic lead, said the project has acquired about 550 acres in the Nikiski area so far and is still negotiating for more. The Kenai Peninsula Borough is examining what impacts the project will have on the community so it can be compensated for those costs — such as upgrades to infrastructure and added fire service. And speaking of infrastructure, the proposed Nikiski facility location sits smack on top of the Kenai Sur Highway, between Miller Loop to the south and Salamatof Road to the north, so Alaska LNG has initiated a highway feasibility study in conjunction with the Alaska Department of Transportation and Public Facilities, to investigate ways to mitigate impacts to traffic.
The project is expected to generate 9,000 to 15,000 jobs in the construction phase and 1,000 jobs in the operation phase, many located in Nikiski. Where those workers will come from is another area of study.
“We have initiated labor and logistics studies last month that will run through the majority of this year, to identify local resources available to support the project, figure out what resources we have, relative to the needs, and do a gas analysis to see what we need to do to fill those gaps,” Nelson said.
The project is hosting a series of business information sessions across the state, as well, with a meeting April 29 at the Cannery Lodge in Kenai.
“It’s the first opportunity to kind of open-door talks about what opportunities will be coming down the road, get businesses engaged/informed in those opportunities so we can all be prepared to participate in those,” Nelson said.
All these nuts-and-bolts decisions will go into the largest question yet to be resolved — will be project be built? Nelson said that there are a series of decision points along the process. The next will be at the completion of the pre-FEED stage to decide whether to proceed to the FEED phase, where the final engineering and design work would be done. Nelson said that, around the middle of 2018, the project will make its final decision, looking at the permitting process, support from the state of Alaska, market conditions and other economic factors.
“At that point you take a look at where you are. You take that $45 billion to $65 billion (cost) range that we’re looking at right now and narrow it and find out what we expect it to cost, look at what the market will bring and make a decision at that point whether to move forward,” Nelson said.
Construction could begin in 2018, though Nelson roughly estimates completion and operation of the project to be 10 years out. As the process continues, AK LNG has set up a Kenai office to offer peninsula residents better access to information, and has hired Josselyn O’Conner, formerly the campaign director at the Kenai Watershed Forum, as the local community engagement manager.