A Texas company said Thursday it is in “advanced discussions” with local utilities in southern Alaska to build a floating liquefied natural gas import terminal in Cook Inlet. The news is the latest development in the region’s race to avert a looming natural gas shortage in Cook Inlet.
The announcement was made during Excelerate Energy Inc.’s second-quarter earnings call. During that call, the company said an integrated LNG terminal would replenish Alaska’s dwindling gas reserves and bring energy security to Southcentral in the face of looming shortages.
“As domestic gas reserves in the Cook Inlet area deplete, the region will need to import LNG to meet its expected local natural gas demand beginning in 2028,” Craig Hicks Jr., vice president of Excelerate Energy, told investors and analysts on the conference call. “Excelerate is in advanced discussions with local utilities in Southcentral Alaska to develop an integrated LNG terminal in the lower Cook Inlet region.”
The company proposes a so-called floating storage and regasification unit. This is anchored to a dock and can unload, vaporize and deliver liquefied natural gas from land or offshore. According to Excelerate, the floating units are more cost-effective than land-based units and can be commissioned more quickly – in 1-3 years instead of 4-6.
“Excelerate would own the FSRU base terminal, make LNG deliveries as needed and sell gas to local utilities and other offtakers,” Hicks said.
Excelerate’s proposal is just the latest in a series of ideas being proposed to stabilize Southcentral’s natural gas supply. Hilcorp, which produces most of the gas in Cook Inlet, warned utilities in 2022 that it would be unable to fulfill existing natural gas contracts without new development in the Cook Inlet basin.
Excelerate Energy, a publicly traded LNG infrastructure company based in The Woodlands, Texas, currently operates 11 floating facilities around the world. At the same time as announcing development plans in Alaska, Excelerate said it is planning a similar floating facility in Haiphong, Vietnam. The company says Vietnam is one of Asia’s fastest-growing economies and needs LNG as domestic production declines.
If Excelerate Energy builds a floating terminal in Cook Inlet, it would not be the first time it has sought to locate in Alaska. The company proposed an LNG terminal. export plant in Valdez more than ten years ago. At that time, it proposed sending gas to Hawaii.
In a statement emailed to KDLL on Thursday, Excelerate said local utilities in South Central will need to import LNG to augment local gas supplies and meet future natural gas needs after 2028. The company said its proposal is a bridge to help utilities transition to a “renewable future.”
It is unclear which Alaska utilities are involved in the talks with Excelerate. The company told KDLL that the talks are confidential.
A spokeswoman for Southcentral gas utility Enstar, Lindsay Hobson, said by email that the company “cannot comment on specific projects due to ongoing business negotiations.” She said the company continues to work with local producers and importers.
“If and when commercial discussions are completed, Enstar will submit the agreements to the Alaska Regulatory Commission for approval and share that information with Alaskans,” she said.
Enstar Natural Gas took steps this summer to build a $57 million pipeline to import natural gas. The company received approval from Alaska regulators for the project last month.
Excelerate plans to open the floating gas import terminal in 2028.
