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LNG Exporting: Alaska Joins Oil Majors on $54 Billion Project

Thanks to developments in LNG exporting, Alaska may soon return to its energy glory days. And that's good news for investors looking for LNG stocks today.

Alaska's oil production peaked at more than 2 million barrels a day in 1988. That figure dropped to 531,000 barrels a day in 2013. Now projections call for a drop to 312,000 barrels a day within the next 10 years.

LNG ExportingAlaska Governor Sean Parnell is doing something about it. He's injecting $5.25 billion into an LNG project, headed by ExxonMobil (NYSE: XOM) that promises to put Alaska in the forefront of U.S. energy again.

Alaska's natural gas resources are estimated to be as much as 236 trillion cubic feet.

And LNG exporting is the most effective way to monetize those resources.

Alaska's Natural Gas Riches

Alaska has an abundance of natural gas waiting to be exploited. It's stranded on Alaska's North Slope and is largely untapped since the 1968 discovery of the Prudhoe Bay oil field. The gas is located near the Prudhoe Bay fields and the gas-rich Point Thomson region.

Alaska's North Slope has proven reserves of 35 trillion cubic feet of gas.

The state does currently produce natural gas – the equivalent of about 1.5 million barrels of oil a day. But almost 90% of that natural gas is re-injected back into the fields because there is no existing way to get that gas to consumers.

That's where this new LNG project comes in…

Alaska's $54 Billion LNG Exporting Project

In September 2012, ExxonMobil, BP PLC (NYSE ADR: BP), ConocoPhillips (NYSE: COP), and TransCanada (NYSE: TRP) came together on a project to export liquefied natural gas from Alaska.

A final investment decision on the project is set for 2016.

Join the conversation. Click here to jump to comments…

  1. yngso | February 22, 2014

    Wow, and will other companies than the ones mentioned be involved?

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