Alaska gas pipeline executive says he expects go/no-go decision by year’s end
- Alaska Beacon
- 3 days ago
- 5 min read
Rex Cannon, co-president of the company advancing the trans-Alaska gas pipeline, set high expectations during an oil industry conference
By James Brooks
Alaska Beacon
A major decision on construction of the proposed 807-mile trans-Alaska natural gas pipeline is expected by the end of the year.
Rex Cannon, co-president of pipeline developer 8 Star Alaska, told attendees of the annual Alaska Oil and Gas Association conference that his company intends to finalize gas sales agreements and then make a final investment decision on pipeline construction before the end of the fourth quarter of 2025.
If the project advances to completion, it would end more than 50 years of false starts, missed goals and dropped promises from a wide variety of developers.
“I’m excited about the gas line because I like an underdog story,” Gov. Mike Dunleavy told conference attendees after standing in the back of the conference hall and watching Cannon’s presentation.
“(We’re) incredibly close. I’m not going to pop the champagne bottle until the contract (is) signed and there is pipe being built and welded.”
Glenfarne, an international energy company, bought 75% of the proposed AKLNG project from the Alaska Gasline Development Corp., a state-owned firm, earlier this year. AGDC retains a 25% stake in the project.
Their joint venture is called 8 Star Alaska, referring to the eight stars on the Alaska flag.
Under the pipeline project’s latest plan, it would be built in two phases.
The first phase would involve building the pipeline itself along a route from the North Slope to the western side of Cook Inlet, where it would connect into the existing Anchorage-area gas distribution system.
That effort, planned for completion as soon as 2029, would be for in-state use.
It would carry gas from either Point Thompson or an under-development oil and gas project near the Dalton Highway to southcentral Alaskans who are facing a shortage.
In February 2024, AGDC estimated that the first phase would cost at least $11 billion to construct.
A Glenfarne spokesperson said after Cannon’s presentation that the first phase could be constructed even if 8-Star doesn’t export gas to international customers.
“Phase 1 is core to solving Alaska’s natural gas crisis because it is both financially viable as an independent part of the project and vital to bringing Alaskan gas to global markets,” they said by email.
Phase 2 would involve the installation of a gas treatment plant on the North Slope, an export terminal on the Kenai Peninsula and compressor stations along the pipeline in order to increase the volume of gas that the pipeline can carry.
That is expected to cost tens of billions of dollars more.
The initial phase of the pipeline wouldn’t need the compressors because in-state demand is so much lower than what would be needed for export, Cannon said.
That first phase also wouldn’t need the gas treatment plant — designed to strip carbon dioxide from the gas before shipment down the pipeline — because the initial gas sources to be used on the North Slope don’t contain much carbon dioxide.
Because the pipeline wouldn’t be built in time to prevent gas shortages in southcentral, Cannon said 8 Star intends to build a gas import facility at the site of its future export terminal.
The import terminal is one of three currently being planned for Cook Inlet. At a future date, Cannon said, the import terminal could be flipped to flow in the opposite direction and become part of the export facility.
For decades, the biggest obstacle to construction of a trans-Alaska natural gas pipeline has been its cost and the need to finance its construction.
In response to questions on Thursday, Cannon said the company is “working two fronts” when it comes to financing.
On one front, “We are working directly with the Department of Energy with their loan program office, and there’s some opportunities there,” Cannon said.
On the other front, the company is seeking loans from banks and “institutional investor types to essentially fund a project where all the key contracts are in place.”
That would require 8 Star to sign contracts with utilities — either in Alaska or elsewhere — that are interested in buying gas from its pipeline.
At full capacity, the pipeline would carry 20 million tons of natural gas per year.
“To date, where we are, is we have signed either letters of intent or essentially cooperation agreements with both PTT out of Thailand and CPC out of Taiwan to supply about 8 million tons of LNG. That leaves about 12 out of the 20 million tons per year capacity. We’re in negotiations right now for well more than those 12. Frankly, it’s going to be kind of a question of who gets there first.”
PTT and CPC are each state-owned oil and gas companies; neither country’s commitment is 100% firm yet.
South Korea and Japan have frequently been mentioned as possible customers for Alaska gas, but to date, neither country has committed. Earlier this week, Nikkei Asia interviewed experts who said they believe the cost of Alaska gas is likely too high for a deal anytime soon.
Cannon, speaking to attendees of the AOGA conference in Anchorage, was bullish on the prospects of a deal and said 8 Star is soliciting bids from companies that might supply the pipe that makes up the pipeline.
“Already, we’ve gone out to 15 different mills and suppliers from around the world, Asia, North America and Europe. We are in the middle of a selection process with prime contractors for pipeline construction,” he said.
The company doesn’t have the pipeline’s full right of way secured, he said, but the company is “95% there on the right of way. What’s left on the right of way … is really either under negotiation or, I would say, well in hand. … A lot of the engineering has already been done. And of course, the permits are there.”
Cannon didn’t mention the possibility of litigation intended to slow or stop the project; every major oil and gas project in Alaska has faced lawsuits.
At the end of his presentation, Cannon signed a ceremonial agreement with the state and the federal government that involves the pipeline’s route through Denali National Park.
“As I’ve said before, it’s like Christmas every day,” Dunleavy said, referring to a prior comment praising the Trump administration. He then moved on to talking about the pipeline.
“This is just one example of the speed by which they’re moving, and it’s going to be an amazing five months.”
• James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. Alaska Beacon is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
