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Energy giants Exxon Mobil Corporation (XOM - Analyst Report), BP Plc (BP - Analyst Report), ConocoPhillips (COP - Analyst Report) along with Calgary-based TransCanada Corp. (TRP - Snapshot Report) have chosen a site for its planned mega project to transport liquefied natural gas (LNG) from Alaska.

Located in the Nikiski area on the Kenai Peninsula, the site was selected after appraisal was conducted relating to environment, socioeconomics, cost, and other project and technical issues of over 20 sites. It will serve as the lead site for the proposed Alaska LNG project’s natural gas liquefaction plant and terminal.

The Nikiski site also provides a pipeline route that would offer an access opportunity to key natural gas markets of Fairbanks, Mat-Su Valley, Anchorage and the Kenai Peninsula in the North Slope. The project team is looking for secondary locations.

Project costs are expected to touch $65.0 billion. Several engineering, technical, regulatory, fiscal, commercial and permitting issues still need to be determined as work on the potential project advances.

Based on the project summer field work activities, pipeline routing definition work are being carried out and would be extended south of Livengood. Constant improvement of the agreed project concept is being carried out by the companies. Currently, the teams are planning on a more comprehensive engineering and design work, consistent with previously released plan phases.

The project will comprise an 800 mile pipeline, which will run from North Slope to South-Central Alaska. It also includes the construction of a liquefaction plant and storage tanks, a gas treatment plant, 42-inch pipeline with about eight compression stations and at least five off-take points for in-state gas delivery.

In the next couple of decades, liquefied natural gas from Australia, East Africa, the U.S., Gulf Coast and Canada will enter the global markets posing stiff competition for the venture. Therefore, for a project having exceptional scale, complexity and cost, a competitive, predictable and durable oil and gas fiscal environment is a necessity to compete in the global energy market.

Currently, Exxon Mobil, BP Plc, ConocoPhillips and TransCanada hold a Zacks Rank#3 (Hold).

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