Exxon submits permit for $45B LNG facility in Alaska

Enlarge Photo

Submitted photo

Rex Tillerson, CEO of Exxon Mobil Corp.

Nicholas Sakelaris

Staff Writer- Dallas Business Journal

Email  |  LinkedIn  |  Twitter  |  Google+

Exxon Mobil Corp. is one step closer to exporting natural gas from Alaska.

The Irving-based energy giant submitted a formal request to the Federal Energy Regulatory Commission for a liquefied natural gas terminal in Nikiski, Alaska, on the Kenai Peninsula.

The project will cost between $45 billion and $65 billion and will be used to freeze natural gas, condensing it to 1/600 ^th its normal volume. The super-cooled, condensed natural gas is then loaded onto ships where it can be exported around the world.

Got Energy? Sign up for our Energy Inc. newsletter here

Exxon (NYSE: XOM) partnered with fellow oil and gas producers ConocoPhillips Alaska and British Petroleum Alaska, along with midstream companies TransCanada Corp. and Alaska Gasline Development Corp.

The project also includes an 800-mile natural gas pipeline with eight compression stations. The production will come from the Prudhoe Bay and Point Thomson natural gas fields.

By pre-filing with the regulatory commission, Exxon can begin the environmental review required for the design and construction of the project.

Exxon already spent $500 million upfront in engineering, which created 250 jobs.

There is an ongoing debate at the federal level on whether the United States should export LNG. Big oil and gas producers like Exxon have been in favor of exporting natural gas because they would be able to sell it at a higher price in countries like China. The country currently has an oversupply of natural gas from all shale plays, including the Barnett Shale in North Texas and the Marcellus Shale in Ohio and Pennsylvania.

The U.S. Department of Energy considers permits to export LNG on a case-by-case basis. Many experts oppose LNG exports, saying it will increase prices and discourage fleets from switching to compressed natural gas.

Nicholas covers the energy, manufacturing, aviation and transportation beats for the Dallas Business Journal. Subscribe the Energy Inc. newsletter