Relative newcomer, Qilak LNG, plans to invest $5 bill in an LNG export facility at Alaska's North Slope.
This facility could compete with Russia's Yamal project for Asian customers towards the end of this decade, its CEO told newswires.
Qilak is 3,700 km closer to Asian markets than its biggest competitor, Novatek’s Yamal LNG in the Russian Arctic.
The aim is to ship an LNG cargo to Asia in 14 days, about twice as fast as shipments from the US Gulf Coast, Mead Treadwell, Qilak's CEO and Chairman, told Reuters in an interview last week.
"This project could open up a whole new province of supply for LNG, ammonia and hydrogen... There are geopolitical advantages and diversifying Arctic gas supplies away from Russia is generally a well received concept," Treadwell said.
Qilak is also aiming to produce LNG at a lower cost, compared with Yamal LNG.
Yamal LNG costs $27 bill to liquefy 16.5 mill tonnes of LNG per annum, company data showed, equating to about $1.6 bill per 1 mill tonnes, according to Reuters calculations.
Qilak's annual output has been put at 4 mill tonnes and at a cost of $5 bill, equating to $1.3 bill per 1 mill tonnes.
The company is working with investment bank Lazard to attract finance and also plans to offer stakes to Alaskan entities, including indigenous investment groups, Treadwell added, himself a former Alaska governor.
"We are speaking to potential investors inside and outside Japan, as well as firms that can help us reduce the carbon footprint of the project," he said, without providing further details.
2030 launch
The project should be launched by 2030 when potential buyers see a shortage occurring. The schedule was delayed from 2027, due of the COVID-19 pandemic, Treadwell said.
"We are focusing on the northeast Asian market – there are countries beyond the northeast Asia who are considering involvement to step up their LNG purchases," he said, adding that Japan's current and future LNG receiving terminals could be also used for transhipments.
Qilak LNG is yet to appoint engineering, procurement and construction, as well as shipping companies, but Nana Worley and Aker Arctic Technology are expected to lead the feasibility study, Treadwell said.
"If we stay on schedule then the feasibility study would be done this year and with front-end engineering design (FEED) in 2024," he said, adding that a final investment decision (FID) is possible in 2025, depending on a number of conditions.
Qilak plans to use gravity-base structures (GBS) offshore Alaska to produce the gas and the company would send three to five LNGCs per month to Asia, according to Dubai-based Lloyds Energy, the project's owner.
Arc7 type LNGCs able to navigate in Arctic waters would be used, similar to those operated by Yamal, Treadwell said.
