Page 4 - AsianOil Week 11 2023

AsianOil COMMENTARY AsianOil

Qilak LNG plans $5bn LNG

facility in Alaska

The proposed project would meet 1% of global LNG demand.

US QILAK LNG has revealed it is seeking to build LNG terminals could be used for transhipment
a 4mn tonne per year (tpy) liquefied natural gas further afield. Qalik would also use Arc7 tankers,
WHAT: (LNG) export terminal in Alaska’s North Slope, since they are able to seal in the Arctic waters.
The proposed 4 million to be completed by the end of the decade. The
tonne per year facility announcement from the company’s chief execu- Long runway ahead
would be 2,000 nautical tive comes as large LNG importers in East Asia Demand for LNG in Asia has always been
miles closer to Asian look to wean themselves off Russian gas follow- strong, with Japan, China, and South Korea as-
markets than key ing its invasion of Ukraine. suming the top three positions last year. More-
competitor Yamal LNG in Qilak is a subsidiary of Dubai-headquartered over, a handful of other Asian countries are set
the Russian Arctic. Lloyds Energy and was founded to build and to become LNG importers in the next couple
operate LNG facilities in the North American years, including the Philippines, Vietnam and
WHY: Arctic using a near-shore concept of commer- Sri Lanka. However, despite Asia’s growing ap-
Qilak sees an opportunity, cialising previously stranded Arctic natural gas petite for LNG, imports of the super-chilled
believing it can use supplies for export to Asia. fuel from Qilak’s proposed terminal likely will
geographical advantage The proposed site for Qilak’s $5 bn export ter- not occur until the end of the decade.
to produce LNG cheaper minal would be 2,000 nautical miles (3,700 km) A heads of agreement (HoA) deal has been
than Yamal, while closer to Asian markets than Novatek’s $27bn signed with ExxonMobil Alaska Production to
geopolitical tensions Yamal LNG terminal in the Russian Arctic, supply 560mn standard cubic feet (15.9mn cubic
could also drive which delivered its first cargoes in 2017. metres) per day of gas from the Point Thomson
importers such as Japan, Capitalising on its geographic location, Qilak field to the Qilak project.
South Korea and Taiwan believes it can produce LNG at a lower cost than The company is currently working together
away from Russia. Yamal LNG. Likewise, competitors in the US with investment bank Lazard to attract financ-
Gulf Coast would be hard pressed to challenge ing. “We are speaking to potential investors
WHAT NEXT: Qilak, since Alaskan terminals can ship an LNG inside and outside Japan, as well as firms that
A feasibility study is cargo to Asia in a fortnight, which is about twice can help us reduce the carbon footprint of the
scheduled for this as fact as a delivery could be made from the US project,” Treadwell stated.
year with front-end Gulf Coast. Meanwhile, Qilak still must choose firms
engineering design Also adding to the attractiveness of the pro- for engineering, procurement and construc-
planned for 2024, and a posed project is its ability to be used as well for tion (EPC), in addition to shipping. However,
final investment decision shipping low-carbon fuels such as ammonia and Treadwell did indicate that Nana Worley and
could occur in 2025. The hydrogen, which is particularly enticing for East Aker Arctic Technology are likely to handle the
project could come online Asian nations that as of now are not on a trajec- feasibility study.
by 2030. tory to meet their climate targets. There is also “If we stay on schedule then the feasibility
the possibility that additional capacity could be study would be done this year and with front-
added beyond 4mn tpy in future phases. end engineering design [FEED] in 2024,” he
“This project could open up a whole new said. Depending on a number of conditions, a
province of supply for LNG, ammonia and final investment decision (FID) could be made
hydrogen... There are geopolitical advantages, in 2025, with the launch of the terminal by 2030.
and diversifying Arctic gas supplies away from The US Arctic possesses proven gas reserves
Russia is generally a well received concept,” of 920bn cubic metres; however, develop-
Qilak’s CEO and chairman Mead Treadwell told ers are getting mixed signals from the Biden
Reuters in an interview. administration. On March 6, President Biden
The proposed project, which would be equiv- gave formal approval for ConocoPhillips’ $8bn
alent to 1% of global LNG demand, is expected Willow oil project. However, on March 13 the
to utilise gravity-base structures with special administration withdrew 2.8mn acres (1.13mn
weighted legs that support offshore platforms. hectares) from consideration for leasing in the
The structure would be linked to the shore by a Beaufort Sea, while the Interior Department has
6-mile (9.6-km) pipeline. recently said it will block oil and gas leases for
A target of three to five tankers per month over 13mn of the 23mn acres (5.26mn hectares)
would be delivered to Asia, although Japan’s of the National Petroleum Reserve - Alaska. ™

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