Donlin Gold Signs Up for Alaska LNG Pipeline Gas
The exploration camp at Donlin Gold, where developers are planning one of the world’s largest open-pit gold mines, more than 2 miles long and nearly 2,000 feet deep.
Photo Credit: Carter Damaska | Alaska Business
The Alaska LNG pipeline project is hitching its fortunes to the Donlin Gold mine development in the Middle Kuskokwim region. Glenfarne Alaska LNG, majority owner and developer of the proposed 807-mile pipeline from the North Slope, signed a non-binding letter of intent for natural gas from Alaska LNG to power the mine site.
Uniting Megaprojects
“A reliable, secure supply of economic natural gas from Alaska LNG has the potential to substantially enhance our ability to unlock value and upside potential in Donlin Gold,” says John Paulson, president of Paulson Advisors, which acquired a 40 percent stake last year, alongside Novagold Resources. “Glenfarne’s global energy experience is well suited to provide a long-term turnkey energy solution that helps advance this opportunity.”
The letter of intent states that the companies will formalize a potential natural gas sales agreement for up to 50 million cubic feet per day. The two developers will also cooperate on delivery infrastructure, currently planned as an approximately 315-mile-long natural gas pipeline from Southcentral to the Donlin site.
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“As Donlin moves into what we hope to be the largest single gold mine in the United States, natural gas from Alaska LNG could offer significant benefits not only for the mine but for the entire Southwestern Alaska region,” says Novagold President and CEO Greg Lang. “We look forward to working with Glenfarne to unlock the value of both of these world-class Alaskan resources: Donlin Gold and Alaska LNG.”
A 2016 map shows the proposed pipeline route from Cook Inlet to the Donlin Gold project.
Photo Credit: Donlin Gold
Almost a year ago, Glenfarne became lead developer of Alaska LNG, holding a 75 percent ownership stake while the Alaska Gasline Development Corporation retains 25 percent. Glenfarne is developing two financially independent phases: a 765-mile, 42-inch pipeline for in-state energy supply, and a second phase for exporting 20 million tonnes per year via Cook Inlet.
Glenfarne Alaska LNG President Adam Prestidge says, “We have great confidence in the future success of Donlin following the significant investment by Paulson. Adding a foundational customer like Donlin Gold, one of the largest known undeveloped gold deposits in the world, to Alaska LNG provides significant volume discount benefits that will result in lower energy costs for Alaska consumers. As we continue to bring on more pipeline customers, the cost of gas for Alaskans will continue to go down.”
Since joining Alaska LNG, Glenfarne has lined up buyers in Japan, South Korea, Taiwan, and Thailand for 11 million tonnes. Glenfarne expected 16 million tonnes’ worth of buyers would need to be secured before a final investment decision within the first year of involvement.
While Glenfarne is signing up offtake partners, Worley is completing the final engineering and cost validation for the pipeline, currently the only federally authorized export terminal on the US Pacific Coast.
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