ExxonMobil Corporation’s (XOM) share price surprisingly fell 0.4% on the announcement that its Alaska LNG Project has reached a landmark with the submission of a formal request to the Federal Energy Regulatory Commission (FERC). The company sought to begin the pre-file process for this major natural gas project.
The FERC pre-filing marks another step forward in development of the Alaska LNG project. It also makes way for activity related to the environmental assessment necessary for the siting, design and allowance of construction for the proposed project. The project’s $500 million pre-front-end engineering design (pre-FEED) phase, which comprises a second season of summer field work, supports this process. The 2014 summer field work that employed around 250 people is nearly complete.
Assembling the data required to support vital environmental permitting for the project and supporting the routing and siting of project facilities were the main purposes of the summer field work. The majority of the work was concentrated along the pipeline route from Livengood to the proposed LNG liquefaction facility site in Nikiski.
The planned project facilities comprise a liquefaction facility in the Nikiski area on the Kenai Peninsula, an 800-mile, large diameter pipeline, about eight compression stations, at least five take-off points for in-state gas delivery, a gas treatment plant located on the North Slope and transmission lines to carry gas from Prudhoe Bay and Point Thomson to the gas treatment plant.
Significant economic benefits are likely to be provided by the project to Alaskans. This includes state revenues, new job opportunities and access to decades of in-state natural gas for homes and businesses in Alaska. The Alaska LNG project is projected to generate about 15,000 jobs during construction and around 1,000 jobs for operation of the project.
Apart from ExxonMobil, other participants in the Alaska LNG project are the Alaska Gasline Development Corporation (AGDC) and affiliates of TransCanada, BP plc (BP) and ConocoPhillips (COP). An application for an LNG export license for the project was submitted in July to the U.S. Department of Energy.
Currently, ExxonMobil carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is Cameron International Corporation (CAM), sporting Zacks Rank #1 (Strong Buy).
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