New Alaska venture plans to ship LNG to Asia through Arctic

A new company plans to partner with Exxon to ship liquefied natural gas from Alaska's North Slope to Asian markets, officials said.

Former Republican Alaska Lt. Governor Mead Treadwell is the CEO of Qilak LNG, which expects to ship the fuel on ice-breaking tankers from Point Thomson, Alaska Public Media reported Wednesday.

Qilak's project would be cheaper than a proposed Alaska LNG pipeline project, said company president David Clarke. He said the early cost estimate for the project is about $5 billion.

Qilak would not need state funding as a subsidiary of Dubai-based Lloyds Energy, which has focused on LNG since forming in 2013, officials said.

Shipping LNG through Arctic waters has been a goal of energy companies since the 1980s and is now more feasible due to climate change, said Clarke, a former BP project manager.

"Over the last three and a half decades, we've seen a significant reduction in the amount of sea ice," Clarke said. "And also in the nature of that ice, there's much less multi-year ice and a lot more first-year ice in the Arctic."

The Russian Yamal LNG project has had success since it began exporting gas two years ago. It has sold gas to markets in Europe and Asia, giving Qilak confidence its effort is financially feasible, Clarke said.

Eliminating the 1,287-kilometre pipeline will allow Qilak to reduce the cost by about two-thirds, Clarke said.

The project's private funding may make it more desirable to the public, said Larry Persily, a former federal co-ordinator for Alaska North Slope gas development.

"This is only the second project I can remember in the past 20 years that didn't want state money."