Thursday night more than 100 people -- many of them energy experts from the U.S.and other parts of the world -- gathered in Valdez and urged Alaska not to postpone plans to build a large-diameter natural gas pipeline from the North Slope any longer.
Those experts said that lucrative gas markets in Asia, mainly in China and Japan, desperately want Alaska North Slope natural gas, but they are beginning to lose faith in the state's willingness to bring that gas to market.
The construction of some sort of natural gas pipeline -- to bring the 35 trillion cubic feet of stranded gas to buyers -- has been an Alaskan dream for decades now. Those present at the 8th annual meeting on the proposed gas pipeline here said that the time to act is now.
They said that today the spot market price of natural gas on world markets reached $12 per billion cubic feet. That's good news for those who dream of our state bringing gas to market, and here's the reason why:
It's estimated that Alaska can deliver North Slope natural gas to Japan at a cost of $8.50 per million cubic feet. Which means that today, at least, North Slope LNG could have been sold at a considerable profit on the spot market.
But there is a fly in the ointment for such hopes. Foreign buyers are losing faith in Alaska. They are beginning to doubt the state's commitment to develop its strandad gas. And so those buyers are turning to places like Qatar, Papua New Guinea and Australia to sign lucrative, long-term contracts.
Those this week's conference here said that if Alaska does not want to lose its chance to get its share of those contracts, it must act… and it must do so now. The reason time is of the essence is because of the long lead time required for the pipeline. It would take 10 years -- and cost $20 billion dollars -- to build an 800 mile gas line from the North Slope to Valdez… along with a gas liquefaction plant at Valdez.
From there, the gas would be shipped -- by huge, LNG tankers -- to Asia.
Such a gas line would be 48-inches in diameter. It would carry 2.7 billion cubic feet of natural gas to "tidewater" each day. The line's capacity could be expanded -- using high pressure compressors -- to 4 billion cubic feet per day in the years to come.
Right now it's still not clear whether Alaska will move forward with the project. But the energy experts gathered here said that Asian nations want Alaska LNG so badly, they are even willing to finance the massive construction project.
Friday, the conference expects to listen to presentations from some of those potential buyers.