Page 6 - GLNG Week 11 2023

GLNG COMMENTARY GLNG

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

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