U.S. oil giant ExxonMobil Corporation (XOM) and its partners have submitted an application to the U.S. Department of Energy in order to export liquefied natural gas (LNG) from the proposed Alaska LNG project.
The application seeks the approval to export about 20 million metric tons per annum of LNG for a period of three decades to countries that have existing free trade agreements with the U.S. and to non-free trade agreement countries as well.
The Alaska LNG project is expected to offer economic benefits to the state such as increased revenues, new job opportunities and the availability of domestically produced natural gas for decades.
As per a study by NERA Economic Consulting, presented in support of the application, the Alaska LNG project will have definite positive economic effects in Alaska and the United States. The project is estimated to create about 15,000 jobs during construction and about 1,000 jobs for project operation.
Located in the Nikiski area on the Kenai Peninsula, the planned project will consist of a liquefaction plant and terminal. Among the other facilities, will be a 800-mile, 42-inch pipeline, about 8 compression stations, a minimum of five take-off points for in-state gas delivery and a gas treatment plant located on the North Slope.
Currently, the project is in the pre-front-end engineering and design phase, which is projected to be complete in 2016. The proposed gas treatment plant, to be built on a plot of over 80 hectares, is likely to process over three billion cubic feet of gas per day. The project is estimated to cost between $45 billion to $65 billion.
The Alaska LNG project participants are the Alaska Gasline Development Corporation (:AGDC) and affiliates of TransCanada, BP plc (BP), ConocoPhillips (COP) and ExxonMobil.
The project emphasizes the company’s continuous endeavors to capitalize on Alaskan resources. Moreover, the filing of an export application is an important step in marketing North Slope natural gas.
At present, ExxonMobil carries a Zacks Rank #2 (Buy). Meanwhile, one could consider a better-ranked stock in the same industry like Statoil ASA (STO), which sports a Zacks Rank #1 (Strong Buy).