Apache Corporation (APA), Chevron Corporation (CVX): What’s Next for the Alaska South Central LNG Project?

Challenges and opportunities for the Alaska LNG project
While Alaska’s hydrocarbon potential is vast, the Alaska South Central LNG project still faces hurdles that include harsh weather, uncertainty in securing permits, and taxation policy uncertainty. According to Larry Persily, the U.S. Interior Department’s federal gas pipeline coordinator, it also faces global competition from similar export projects being developed in Australia, Russia, the U.S. Gulf Coast, and British Columbia.

Still, all global LNG projects have their share of challenges. In Australia, for instance, cost overruns have become a major cause for concern, while political uncertainties threaten projects in Russia and British Columbia. Even projects based in U.S. Gulf Coast are faced with uncertainties regarding fees and transportation, Persily said.

Given this backdrop, the Alaska South Central LNG project may actually be more competitive than might appear at first glace. In addition to having an established gas reserve and known legal infrastructure, the Alaskan coast offers even closer proximity to Asia than similar projects in western Canada, which could potentially allow for lower shipping costs.

The article What’s Next for the Alaska South Central LNG Project? originally appeared on Fool.com.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool owns shares of Apache.

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