Let's roll. Hello and welcome to the Must Read Alaska show. Here you get relevant and timely content you won't find anywhere else. You can learn more by going to mustreadalaska.com and this show can be found on YouTube, Facebook X and your favorite podcast site. Let's talk truth about politics, the economy, and all things Alaska. Now the host of the show, former state legislator, combat veteran, small business owner, and all around great guy, Ben Carpenter.
Welcome to the Must Read Alaska show, friends. I'm Ben Carpenter, your host and guide on a journey of discovery of truth and independent-minded thinking.
Must Read Alaska exists because discovering the truth is hard. It calls upon us to be relentless in defense of common sense, our faith in God, and the exceptional values enshrined in the Constitution. Freedom is not free. It is not for the timid. It was not secured by the weak of heart or mind. Maintaining freedom requires every one of us to be alert to daily encroachments in our liberties and on the grand deceptions of those seeking power and control over others.
Every generation must pledge their lives, their fortunes, and their sacred honor, and we must never take our freedom for granted. We are not anti-government. We are pro-government, of the people, by the people, and for the people. And today, I've got a show that is something that people have been asking about. What is going on with the LNG pipeline?
Depends on who you talk to, but people, you know, old timers are saying, hey, we've heard about this pipeline for years and years, decades. It's never going to happen. And you got others that are like, you know, I hear people talking about it and it sounds like the right people are saying the right things. So what's the truth? Yeah.
All right. Well, last week we had the Governor Dunleavy put on the Alaska Sustainable Energy Conference. And there was quite a few good talks and a lot of good information that was put forward. I went up and attended the conference. Today, I thought what I would do is pull some clips of the conversation that Governor Dunleavy and Brendan Duvall, the CEO of Glenfarn, which is the company that agreed to help bring the Alaska LNG project to fruition.
OK, so they got up on stage and answered some questions and had a good conversation. And I pulled some clips together to share with you what they what they said. And I think this will be helpful. I think you will come away with with the next 30 minutes or so and and have a better idea, better understanding of what's going on with the with the LNG project.
So why don't we start first off with listening to Brendan Duvall describe himself and kind of a little bit about his background and where he comes from. Well, thank you, everyone. Thank you, Governor Dunleavy. Thank you for the welcome. As you can imagine, for an energy developer to be invited to develop a project like this, it's a really amazing opportunity, but more importantly, a responsibility.
And we're going to be doing business with many of the people in the audience here, the local Alaskans, the national entities and our international friends. And so it is going to be an intimate relationship with so many areas of the ecosystem of the Alaska energy community.
And so I thought I would, just before I sat down with Governor Dunleavy, what your mom and dad taught you is introduce yourself, do the polite thing so you know who you're gonna be doing business with. So I originally grew up in Australia. I'm a dual citizen of the US and Australia, roughly half of my life in both countries. I grew up in a small country town outside of Sydney.
And when I graduated high school, I went and studied electrical engineering. I ended up getting a robotics degree. But importantly, like many of us, we had to pay for college. And I'm very proud of my role. I was a member of the Australia's Welders Union. I was a pipe welder, small bulk pipe in the repair and maintenance of steel mills.
and power plants and that paid for my college. It was a great experience and it was a good way for me to better understand when people are working hard in their coveralls and they go home at night. It taught me a lot about safety, the camaraderie of the workers and if you know how to inspire them and lead them, you can actually get an amazing amount of efficiency out of those workers.
The other thing I learned from that was I was a terrible welder and I knew that I couldn't make a long-term living out of welding so I ended up going into the investment industry and I spent 15 years with an Australian infrastructure developer and investor called Macquarie Group and that brought me to the United States where I started Macquarie's New York office 25 years ago doing major capital projects, investing, often dropping in as the CEO and I really enjoyed the
the engineering and the construction side of those projects. I spent a small detour living in Caracas, Venezuela in the late 90s, and people may remember that's when Hugo Chavez got into power. And that actually created where you might have seen in the video, we started our business in South America. And so we started our very first power plant in a remote island 1,000 kilometres south of Santiago. We had to get in a ferry, put our car on the ferry to get out there.
and that was roughly 13 years ago. We're now 800 employees, 60 assets. We're gonna start building Texas LNG at the end of this year. That's a $7 billion project, but I'll tell you a bit more about that. And Governor Dunleavy and I met last year We were at Sarah Week and Frank and Matt from AGDC approached me. And we've been having a tremendous amount of success on Texas LNG. And it was during that that the governor saw and he said, do you think you can bring some of that
private individual developer capability to Alaska. And I'm proud to say we've accepted that challenge and the governor and I are gonna talk a little bit about why we did it and why this project makes so much sense. Well, so if you're wondering, what is the LNG project? Maybe you're not from Alaska and you're listening and want to know. Governor Dunleavy gave a little bit of history here and a timeline of what has gotten us this far with regard to natural gas pipeline in Alaska.
And I think that conversation ignited some things. Because as I mentioned, this project has been talked about and talked about and talked about. And it's gone through different iterations, what could happen, what couldn't happen, et cetera. And for the longest time, and I'll be brief, for the longest time, the gas is actually, in some cases, more valuable in helping with our oil production up on the North Slope.
I'm going to give you quick timelines. Around 2015, 2014 to 2015, our watchdog, a state watchdog, AOGC, our Alaska Oil and Gas Commission, basically, allowed BTUs of gas to start to come off of the slope. This was significant. 2014, I believe, was the date. I could have the date wrong. I was in the Senate. We had passed two enabling bills to build
the Alaska Gas Line project for an in-state project and an export project. In 2020, all the permits for the project were secured. All the federal permits under President Trump were secured. When the Biden administration came in, they supported the project. It was during this time that loan guarantees were also put in.
to help the project. And those loan guarantees are inflation-proof, with some estimates up above $30 billion now for the loan guarantees. President Trump comes back in. Before he won office again, he put out a video for Alaska, a campaign video, in which he highlights the Alaska Natural Gas Pipeline project.
He's elected. He campaigns partially on energy, partially on this project. He gets elected on day one of his office. He issues an executive order solely for Alaska, focused around energy, critical minerals, et cetera, because he knew, he saw before what Alaska could do to help the country and help the world.
And then here we are basically today. We signed an agreement. We signed an agreement in Tokyo that Glenda Farm would be the private lead. We had a fantastic trip to Asia with visiting our allies in Taiwan, friends in Bangkok, Thailand, friends in Korea, friends in Japan. And we feel we're on our way to really something very tangible. And we're going to talk about why that is and what that looks like.
All right. So for further conversation here, we're going to get into and listen to Duvall break down the project by phases to help us understand what their plan is. And eventually we'll get to a timeline so you kind of understand when this is going to happen. So here's Duvall on the phases of the project. Making this project down into three phases is important. Do you want to talk about each of the phases?
So if we break it down into phases, each phase, what we found was independently economically financeable, it breaks it into smaller financings. And so the very first phase is what we call the domestic portion of the pipeline, which is bringing gas down from the North Slope to Anchorage. It's a 42 inch pipeline for our domestic needs is quite large.
But we won't be putting the compression in that original, that initial phase design. There's enough pressure coming out of the slope to free flow. And that will allow us to de-risk the Alaskan energy supply. And in order to do that, we have to analyse with the volume we're flowing and the pricing that we need to charge for that, is that reasonable and does that avoid the energy emergency in Alaska?
And it does. And the amount of financing we need to do there is reasonable. So that's check number one. The second phase is when I'm talking to my international partners that want to buy LNG, one of the things they say to me is, well,
That's really great. Now that we know the pipeline is going to be built, we can just focus on the liquefaction facility being built. And so the first phase of that, we can break it down into train one. There are three trains for the 20 million tonnes, train one, train two, train three. And then we can do another FID, a final investment decision where we commit all the capital and all the construction starts.
And that's the second phase. And then the final phase is when we go to the full volume of LNG, and then we have to build the complete gas plant on the Arctic slope because the CO2 content of Prudhoe Bay gas requires a lot more processing. And so there are three phases. Each of them can reach their final investment decision, attract capital in independent financings. And so these are really bite-sized financings.
And over the last 10 years there's been $200 billion of independently sponsored US LNG projects. So actually the predominant form of financing for LNG facilities in the US has not been on the balance sheets of the big oil and gas companies. It's actually been independently sponsored projects. And so we're going to take the same business model.
So you're talking about a pipeline project that's going to run a pipeline from the North Slope all the way down to the Cook Inlet here in Nikiski. And it's going to take five or six years to get it built. Projected costs somewhere between $30 and $40 billion. The front-end engineering and design that's going on now is going to help confirm what the costs will be. But projected to be somewhere between $30 and $40 billion.
probably not going to be less, but might be more. So, I mean, one of the biggest questions that I've got and, and, um, what, uh, Duvall helps answer here. Um, how do you manage such a large project and how do you keep it from getting more expensive as, as time goes on? How do you manage, um, cost overruns? And he speaks to that.
So we've all heard of cost overruns, that projects of this size, this scale, this scope, magnitude, there's going to be cost overruns. It doesn't matter what your feed says. There are going to be huge cost overruns. You just have to look at Canada projects there or Australia projects there. What do you say to that?
Well, the first thing is I have to look at these things as a developer from the ground up. And the first analysis I do is just basic fundamentals. And when I look at those fundamentals, I know what it costs today to build a liquefaction facility on the coast of the United States, because I'm bidding out my modules, my OEM equipment. Some of my business partners are here doing that for me. So I know what it costs to build an LNG facility on the Gulf Coast.
The cost to build that on the Alaska coast, the labor is going to be a little bit more. It'll be slightly higher. But I know the efficiency and the ambient temperature here is fantastic if you're an operating engineer. So we'll get more efficiency out of it compared to the Gulf Coast. So immediately, I actually know the cost of building the liquefaction facility. And that's 40% of this budget. And I know it's reasonable. And I know it's reasonable in these market conditions. And so that's the first step. I know that I can build that and that works.
Then I look at the pipeline, right, and the first thing I look at is what are unit rates for construction, constructing pipeline. So if we're in Texas and it was just flat and we just were going straight across Texas, easy, $150,000 per inch mile, so the diameter of the pipe and the distance, that's a metric used in the lower 48 for easy construction.
Then I put on that let's say a 60% premium to $250,000 per inch mile to take into account the extreme conditions of Alaska. And then I put another 40% on top of that and I come up with my budget to take into account cost overruns. Now the thing to remember with a pipeline is
15% of it is actually metal and steel and equipment. The rest of it is logistics, planning, man camps, labor, oversight, testing. And so the real problem with constructing a pipeline, it's not constructing it, it's when you're not constructing it. When the construction crews are stuck in the mountains or in the snow, there's a regulatory approval or a lawyer in head office won't approve a rerouting.
So I look at why would we stay at those price ranges. It's because it's a very unique situation. And I challenge everyone in the room, and there's people who have done projects around the world, where someone would come to you and say, Brendan, here's a pipeline. All the engineering is already done. It was done by one of the largest engineering firms in the world. At the time, it was reviewed by Exxon and Conoco.
You're in a right-of-way where all the access roads and all the right-of-way is parallel to a globally recognised pipeline and a state-run rail system. All the geotech drilling that you need to take a view on it has been done, and by the way, you still have access to the old records.
And where you're coming from, there's thousands of employees up on the North Slope that know how to live and work in the Arctic and say, do you think you can get that construction cost right? And I say, absolutely. Very few people get the opportunity with such
preparation in place to make that decision and the and the unit rates i'm telling your unit rates today these aren't out of date unit rates and so the main concern that governor dunleavy and i discussed is some of the western canada pipelines that had cost overruns that went beyond that that was because their construction crews were stuck looking at each other
where the corporate headquarters was worried about federal and state permitting government agencies telling them to stop if they went down the wrong route. And so here we've got the gold-plated outcome, is we're in Alaska, we have met both the secretaries and the administrator, the three cabinet-level people that said, anything that we need will be approved at the right pace, quickly. The thing is, everything is already approved.
It really, really, really is a unique situation that I feel blessed to have been invited to lead. All right. So plans to have natural gas pumped out of the ground on the North Slope, put into a big pipeline, shipped down to the port here in the Kenai Peninsula area in Nikiski.
where it goes through a processing facility there, turned into liquid natural gas, and put on a boat. And then there are customers, potential customers at this point, because there's no signed agreements, but a lot of interest from Asian countries for replacing their sources with a more reliable source, as we'll get into, a more reliable source of natural gas.
And so how in the world can we make it feasible, cost-effective to take natural gas off the North Slope and ship it to Asia and be able to make any money on it? And Duvall covers what it means. What's the challenge with shipping nowadays? If you want to just talk briefly about the shipping, how the shipping from Alaska compares to the Gulf Coast or other places in the world.
So ultimately, as we probably know in the room, LNG is sold on a price per MMBTU. So I bought a cargo of LNG just last week, delivered into the coast of Columbia. We unloaded it. We paid about $12.50 per MMBTU. If you look at long term futures, the long term price in theory, which it's technical, is probably $9 or $10 per MMBTU. So we know what the price of LNG is. I've just signed $40 billion worth of contracts for my project in Texas. So I look at the fundamental build up of what creates a
a price stack for building out an LNG pricing arrangement because I have to do it regularly. So the first thing we look at is shipping. What is the shipping from Alaska? And I'm really comparing to other great American LNG because our friends that want to sign with the United States have a choice, Gulf Coast or Alaska.
So if you're shipping from the Gulf Coast, you either have to go through Panama Canal. The Panama Canal is so busy now with so much global trade, you can have a 10-day wait on either side of the Panama Canal. You've got to go to Japan or Taiwan or Thailand and come back, wait again, and come through. So most of the boats now are actually going around Africa, passing under India and coming through the Straits of Malacca. A lot of contested waters. There are things called pirates. Look at some movies. And they eventually arrive into Asia.
That's three times the travel distance, which means three times the cost. So we have a 300% advantage shipping from Alaska. So that's the first truism. The second truism, we have stranded gas up on the North Slope. I know the price that we're settling out with our friends up there.
And I compare that to Henry Hub, which is feed gas. So I'm comparing feed gas in Alaska, feed gas on the Gulf Coast. And that's anywhere for the long-term futures. People here that know about the Henry Hub futures, they're $4, $4.50. And then in a volatile time, it can go to $6. We've got a 200% to 300% advantage with our feed gas coming out of Alaska. So second truism, we're ahead on shipping. We're ahead on the feed gas. Then I look at the actual cost to
to pay for my facility that's at the end of the pipeline called the liquefaction facility. And I just told you, it's roughly the same cost when I take into account unit rates. I'm building one on the Gulf Coast. It'll cost a little more to build here in Alaska, but I get more throughput per piece of equipment because of the great ambient conditions.
So I'm ahead on feed gas, ahead on shipping, break even on the liquefaction fee. When you do all that analysis, I'm 150% better before I then go and look at paying for the pipeline. And I can put, I just went through the way you can actually analyze pipelines. I put the highest estimate in there for that and I can still deliver to Asia at a 20 to 30% discount depending on where the volatile price of Henry Hub is.
And we can actually offer a fixed price if we need to. So it's a very, very unique opportunity to sell and a very, very unique opportunity to buy if you want US LNG that's not going through contested waters, that's cheaper than the alternative at less risk given the distances. So it's just truisms why this works.
Next, we'll hear from Duvall on why he thinks that managing costs is something that's doable. ...on the cost overruns in certain countries. Is that an absolute or are there examples in America where there weren't the cost overruns that occurred in some of these other countries? So I think that's an important point. Back in the old days,
National governments or oil and gas majors were the only entities that built LNG facilities. And I take it back, some of the old timers here may remember the IPP outbreak in the 80s where suddenly utilities didn't have to own the power plants, independent developers.
And so the LNG world has gone through that same transition where independent developers have now, I wouldn't say the norm, but very much successful. And why have the independent developers been successful? There is so much capital available for good projects through the bank market, the bond market, on the debt side. All these infrastructure funds can't find enough place to put good money.
Everywhere that private equity infrastructure funds have put money in the United States, in LNG, they've made really good money because the projects have been so well put together. Why are they so well put together? When you do what's, it's a technical term in the world of finance, project financing, the only money that's available is the money in that one company that's building. The only reason it's there is to build that project.
So the amount of scrutiny you have from the rating agencies, the bondholders, the banks that do this for a living, and then you have another partner investor and they sit down and you go over the numbers, you go over the numbers, and then you can't go back for more money. So it creates this amazing discipline to bring the cost down.
get the execution nailed, and you don't get that cost overrun. Now things will go wrong, we've got a contingency, we've got second checks, or we've got to set some money aside for known problems, and I'm not saying this is gonna be easy. We will have problems, we're gonna be on the phone with our contractors and our partners, but these things get done, and we're doing it in a way where we get
10 15 sets of eyes looking at the numbers before anyone allows us to start spending the money and that's the discipline of project finance and that's why you often see the independent developers not having to cost overruns of the major companies that if not careful can be perceived to have endless balance sheets to keep funding when when people on the tools change their mind so it's it's
So let's take a look at the phases again and do a little bit deeper dive into what the timeline looks like for the project. So it's one project, but three distinct phases, three distinct phases that could have different types of financing, different types of ownership over that, your liquefaction plant.
an export facility, your pipe, and the gas conditioning plant on the slope. Just talk a little bit again about the phases and timelines, because we did talk about our need here in Alaska for gas. I mean, the thing that's always, I think, galled Alaskans internally and governors and elected officials is we are literally drowning in energy. We've talked about this all this week. Incredible wind resources. I mean, just out this door, right here, Cook Inlet, you have hundreds of years of coal.
You have major gas field, major oil field, incredible wind sources like no other place on the planet. You have geothermal with our 130 volcanoes. One is 90 miles, I think, the distance is 90 miles from here. Again, tide. All kinds of energy, biomass, you name it.
But because of our distance, our scale, our population being spread out, we've always been hampered by high energy costs. So again, what happened last year was absolutely a game changer. It really put to rest for us in the state of Alaska that maybe we can wait this out, that maybe something will come. We'll figure something out. When you have bases that have to scramble F-35s,
I mean, you have army bases that have to be able to deploy troops rapidly in case of conflict. I mean, you all saw what happened with the balloons flying over Alaska, North America a couple years ago. Our neighborhood that we live in, we have got to make sure, and this is a discussion we're having with the Trump administration, and they're very aware of this, but we have got to make sure we have gas. So when we look at the timelines,
in terms of when do you think you're going to wrap up feed. And again, you mentioned what you think is very important. A lot of the engineering has already been done on this by great engineering from anyone that looks at this would tell you that. So you've got to update feed on the pipe. And then let's talk about timelines on the feed process, the FID process, ordering, that sort of thing on the pipe. And then we can go to the other components.
So I think you've heard the phrase FID, final investment decision. And on that day, it's a really big important day in a project's life where typically you draw down on the capital for the first time and you issue notice to proceed to your contracting partners, you place the purchase orders. So we've got a fast track, ambitious set of steps to get to that by December this year, Q4 this year. Now that's ambitious, guys. You'll have stone throwers saying if we miss it by a day or early,
But that is achievable, and why is it achievable? It's because the engineering that was done for this, and you bring any pipeline contract or any pipeline developer, and they will tell you, I've never seen this much amount of engineering at this phase of the project. So we're doing what we call a top-up feed where we're gonna be pricing, we're bringing contractors in, and let's come back to the local partnering later, Governor, because that's really important for the people in this room.
and we're going to price that and i had meetings here with um suppliers of steel and pipe and so we're going through a logistics plan how to get so much pipe in at time and so we're going to over the next six months financing planning talking to the the loan program which is another thing we should talk about financing final engineering and we issue notice to proceed in december
That gives us 2026 to do a lot of the detailed engineering, the detailed planning, issue the purchase orders into the steel mills so then they can send the steel to the pipe mills. And then we'll start stockpiling pipe towards the second half of next year.
so then we can hit the construction seasons of 2027, 2028. We'll have four spreads up the pipeline. We've been talking about double teaming some of the spreads to speed it up. So we're dropping pipe in 2027. The second batch of pipe comes in in 2027 and we drop that into the ground in 2028. And our objective is to try and get gas flowing. Again, we've got to be ambitious. Maybe to Fairbanks by the end of 2028, maybe. But definitely we'll have the thing done by 2029.
That's going to be a lot of hard work, but that's our objective. And we can talk separately about the LNG facility if you want. So the whole thing is about de-risking, de-risking, de-risking. So our partners in Asia, when they sign a long term LNG offtake, they have to commit for every
a ton of LNG, tens of billions of dollars over the next 20 years. So when they sign their agreement with us, they have to have confidence we'll get it built, otherwise they've wasted that time. And so having issued notice to proceed on the pipeline, that's a huge de-risking event.
So what we'll do through 2026 is we'll actually do a deep dive feed because LNG technology and LNG manufacturing capabilities have improved tremendously over the years. It's not like they're getting worse, they're getting better. So I really want to run a re-engineering process during 2026.
And then, because I'm doing, the value engineering outcomes we had in Texas LNG were superb. And so we want to do the same thing here. So the aim would be to issue notice to proceed on the LNG facility at the end of 2026. And typically the LNG facility will take somewhere in that, you know,
it's no shorter than four years and you really want to get it done in less than five years. So then that brings us into first LNG again, maybe some testing LNG in 2030 and you know, up and running with cargos into Asia in 2031. Okay. So that was a lot. It was a lengthy segment there. So just to sum it up,
Final investment decision, meaning money starts getting spent on the pipeline portion phase of the project. Sometime the goal is at the end of this year, at the end of 2025. That way, pipe can start getting ordered and start being manufactured and start getting shipped. The liquefaction plant that would need to be constructed in Nikiski.
The final investment decision for that project, that part of the project, would be at the end of next year, at the end of 2026. Front-end engineering and design would be done next year on that project. So what about the third part of the third phase here, the third part of this major project, which is the carbon sequestration plant on the North Slope?
Once you're going through the process with the liquefaction plant, you're doing feed updates on the conditioning plant on the slope as well. Yeah. So we've got a big plant we call the Arctic Carbon Capture. CO2 is stuck with some of the gas, particularly at a high level out of Prudhoe Bay. And so there's a very significant processing plant that is much more important for train two and train three and that full expense.
And so really, we'll reach FID on that at the end of 2026 as well, because we want to do some reengineering during the year of 2026. And that'll be online in time to supply trains two and three. And we'll probably need some of it for train one, but there's final engineering around that. If you can, talk about some of the benefits to local contractors, local workers. I know currently the work being done in the slope and what we refer to as just the beginning of the renaissance in oil.
So we're going to hit that workforce question here in just a minute. But as you heard, the third part of that project will be the last part of the project to be decided, final investment decision and built. And so that'll be out.
a little further apart. So let's get to, uh, governor Dunleavy's question here, which is, which is probably on everybody's mind. What is going to happen to Alaska with, with a project of this size? I mean, men, there are many people who are still alive who are working and, and, um, know what it was like to go through the project that built the taps, the trans Alaska pipeline oil pipeline. Um,
But there are many people who have never seen a boom like that. And what does it mean? What does it mean for the workforce? So let's hear Brendan Duvall on the impact to the local workforce. What's the size of the workforce in the construction of this project for the six years or so that you anticipate construction will take? So talking about local engagement, local involvement,
When Governor Dunleavy and Frank and Matt and Brad and their team at AGDC, we started talking about this project, I actually read as many books as I could on the TAPS pipeline. There's a couple of online documentaries. And it really is an amazing effort of teamwork. And the local knowledge that they didn't have back then on building the pipelines that's available now is really, really fantastic.
And so one of the reasons we brought Worley on as our engineering partner to do a bunch of work is their knowledge of how to get the right partnerships with local employees, local contractors, the Alaskan native corporations. And so during construction, at the peak we'll probably have something in the order of 5,000 workers if you add up the peak and then over time there's probably 1,000 full-time jobs if you do the extended analysis along the pipeline and the LNG facility.
And so we will be going through a second phase once we've got the large balance sheets of the global partners. They need to partner with locals. We've made a commitment in our joint venture to really work and give every opportunity to our local partners.
And I'll just say it's amazing the number of emails that I've received. And so I don't know if anyone's in the room that sent it, but they looked up my email address and they said, Brendan, my grandfather worked on the taps. He always said there was going to be a gas line. You know, this is fantastic.
I graduated high school three years ago, is there any way I could get an apprenticeship? I actually can't reply to all of them. And so the amount of local support, if you compare that to a different country or a different state, it's really amazing. So there is an amazing, we're actually gonna overwhelm the local workforce, which is a good thing, I think. But you guys better get ready, there's gonna be a lot of employment happening here.
Well, that's encouraging for an economy that's kind of been struggling over the last decade or so to hear that there's quite a few jobs going to be coming to the, especially to the Nakiski Kenai Peninsula area, but all throughout the state of Alaska and on the North Slope.
So I really appreciate Governor Dunleavy putting this conference together and specifically sitting down with Brendan Duvall and having a conversation about what is going on with the pipeline and for making this video available. And I thought we'd play one last clip from Governor Dunleavy, who does a pretty good job summarizing the value of the project. And I think you'll appreciate this.
Take a second and in your mind think about this for a moment. If you had a project, a large gas project that had all the permits, that would be of value. If you had all the right-of-ways established, that would be of value. If you had all the known gas quantities that have been recycled for decades, we don't flare our gas as a practice up in Alaska, that would be valuable. If you have a history of building large projects, including pioneering LNG export to our Asian allies,
That might be valuable. If you have a short shipping distance, one of the shortest in the world for gas of this type in this location in the world, that would be of value. If you had a Democratic and Republican administration supporting this project, surely that would be of value. If you had a president currently
that puts this project as one of the top projects on his list and continually talks about it and gets updates on it. You saw the three gentlemen that were here this week. That should be of value. If you have a known, and Glen Farn is known, if you have a known LNG company that works with LNG in South America, Texas, knows Gulf Coast, knows LNG, and is partnering with some of the best engineering firms in the world, that should be of value.
So really what we're looking at, correct me if I'm wrong, is we're looking at updating feed on the pipe. Once that pipe is de-risked, people have told me that if the gas was on the coast and you didn't need a pipe, the gas would be flowing already. But once the pipe is de-risked and you go to FID,
The rest of it sounds like it's going to come together pretty rapidly. Do you want to talk about that? Well, the governor makes it so easy. Just like that. The reality is everyone in this room knows mega projects are difficult. They're sleepless nights. You've got to have really strong partners. You arm wrestle over difficult decisions. You've got to partner, partner, partner, never give up, never give up, and be optimistic. But as the governor said, when you go down the list of...
and the whole right of way is paralleling whether it's the equipment on the north slope all the way down to the peninsula where there's already a mothballed LNG facility. The whole route is there that like all those projects that have the cost overruns, the ones that are done in the jungle, the outback of Australia, the jungle of South America, Mozambique, they're all done through pioneered routes where literally the first
is chopping with machetes, getting through. This is, as odd as it sounds, it is just hard to believe how much is lined up here. And once you break it down into the pieces, then the scale of it becomes less daunting. So there's no doubt this is gonna be really, really hard and a lot of angst, but it really is a tremendous opportunity. And I invite everyone in the room to be part of it and step forward where you wanna be involved.
Okay, I'm going to ask the question that I probably shouldn't ask. Confidence level. Are we going to have a pipeline here in a few years? Well, I see every reason why we will, and I've come here and I've put my name on it. And when I put my name on something, I'm stuck. I've got to get it done. And the fundamentals allowed me to do that with good decision-making, not rolling the dice. So the answer is yes. Well, as they say on the slope, drill, baby, drill, and build, baby, build. Thank you, Brendan. Thank you very much. Thank you.
Well, that's encouraging. And so what was it said in this meeting and things that have been talked about before that I think is also very valuable to point out here? And remember that Duvall is the CEO and the founder of Glenfarn, which is a private company. You won't find it on the stock market. It's private.
He signed an agreement with the state of Alaska to take over 75% ownership of the project with the goal and the directive, right? This is the agreement that he's made to take this project through front-end engineering to design to a final investment decision and through the construction of the project, right?
And up until final investment decision, there's a bunch of money that's got to be spent. And that money is not coming from the state of Alaska anymore. That money is coming from Glen Farn or whatever resources they have, whoever they've got partners with that would help them. So that money, that cost is somewhere around $150 million. Okay.
final investment decision, right? Which is at the end of this year for the pipeline phase and the end of next year for the liquefaction plant in the Kiske phase, those decisions aren't foregone. Like they, you could get to the final investment decision and say, you know what? This is not going to work.
And then all of the money that you've just spent and all the time and energy, it is, you don't get that back. Like it's, it's done, right? If you're not going to go forward with a project, then that money is spent. And that money is, is capital that he has that he must believe so much in the project to be able to say, yes, I'm going to take the risk and do all of the work and get up to that final investment decision and say, yeah, we're going to move forward. There is, there is,
better than average odds that I'm going to put $150 million down and my reputation down to say that we'll be able to move forward with the project. there's no guarantees in life, but, um, when somebody is that committed and that sure it, it, um, it's encouraging in my mind to think that, that, that the pipeline, the natural gas pipeline is something that is, um, within our, within our reach. And that's, um, that'll be a game changer for many Alaskans. And I, I am, I'm very, very thankful.
that we've stuck it out over the last, this last decade is as a governor Dunleavy pointed out that we really started this endeavor again in 2014. So we're, we're past the 10 year, 10 year mark of, uh, of effort and struggle and trying to figure these things out. So, um, thanks to Frank Richards and the, uh, AGDC crew who've gotten us this far and have, and have, uh, you know, kept the faith and kept their, their, um,
kept their effort alive, even when some people say, hey, it's it's wasted effort and we're never going to have this pipeline. I really appreciate their their efforts.
Well, this brings us to the end of the show today. If you've got questions about the pipeline, you can reach out to me, bcarpenter at mustreadalaska.com. I'd be glad to take your questions and try to answer them on another episode. So I hope this has been helpful. I hope that you've learned something today. And, well, keep your fingers crossed. Good things will happen here if we keep a positive attitude and keep working. So until next time, stay frosty out there, Alaska.