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Alaska LNG developers, EPA split on pipeline route through national park

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Alaska LNG developers, EPA split on pipeline route through national park

Developersand federal regulators have different ideas on whether to route a natural gaspipeline that would support the proposed Alaska LNG Project LLC through the Denali National Parkand Preserve.

Incomments submitted to FERC on Sept. 23, the U.S. EPA Region 10 office said aproposed alternative that would route the mainline of the Alaska LNG projectthrough the national park is the "least environmentally damaging"option because it could reside in existing rights of way along the existingGeorge Parks Highway. The rights of way were issued by the U.S. InteriorDepartment under the Denali National Park Improvement Act.

TheEPA-favored alternative would route an 8.5-mile section of the pipeline throughthe park, with just over 6 miles actually in the park. The section is part of amainline that would send natural gas from a gas treatment plant on the NorthSlope to a liquefaction facility on the Kenai Peninsula, where LNG would thenbe exported to international buyers. The pipeline would support at least fivenatural gas interconnection points that could allow for future in-statedeliveries.

ButAlaska LNG's developers said the alternative route would require the entireproject to go through a review process under the Alaska National Interest LandsConservation Act. Such a process would be "unreasonable and impracticablefor a $45 billion-$65 billion project of the complexity and scope of the AlaskaLNG project," according to a Sept. 26 FERC filing.

Exxon MobilCorp., ConocoPhillipsCo., BP plcand the Alaska GaslineDevelopment Corp., or AGDC, have all served as partners in theproject, which is not expected in service until 2025 at the earliest. The Wall Street Journal reported thatExxon has decided to back out.

ConocoPhillips and AGDC said on Sept. 21 that the two developers werenegotiating the formation of a marketing joint venture to advance the project.

Routingthe pipeline through the park would increase the chances that it would fail toget approval, developers told FERC. Because federal authorization would becontingent on the project's successful application under the Alaska NationalInterest Lands Conservation Act, the entire Alaska LNG project could berendered invalid if any part of the project failed to comply with the act. Thedevelopers asked FERC to drop the alternative from consideration.

"Whatever the comparative benefits mightbe of evaluating a minor route variation through the [Denali National Park andPreserve], the consequences render doing so impracticable," projectdevelopers said.

As proposed, the entire Alaska LNG project could include anup-to-4.3-Bcf/d gas treatment plant and more than 60 miles of large-diameterpipeline attached to the plant, a three-train gas liquefaction and exportterminal in Nikiski, and approximately 800 miles of 42-inch-diameter pipelinewith eight compressor stations connecting the treatment plant to the LNGterminal. (PF14-21)