Pantheon Resources pledges support for Alaska LNG pipeline funding, igniting controversy

In the United Kingdom, on December 5, 2024, Pantheon Resources plc announced support from the Alaska Gasline Development Corporation (AGDC) toward the funding of the Front End Engineering and Design (FEED) for the Alaska LNG Phase 1 pipeline. This announcement comes as AGDC has received approval from the Alaska Industrial Development and Export Authority to negotiate a letter of credit that will help backstop initial FEED costs. The development of this pipeline is crucial for the injection of natural gas resources from Alaska’s North Slope, with Pantheon Resources being a pivotal player in this initiative, as they develop the Kodiak and Ahpun oil fields nearby. Their involvement is expected to profoundly influence energy security in the region and contribute positively to the state’s economic outlook. The Alaska LNG Project represents a significant infrastructure project for the state, aimed at transporting natural gas from the North Slope to Southcentral Alaska. Pantheon has already laid some groundwork by signing a Gas Sales Precedent Agreement with AGDC in June 2024, which necessitates reaching a Final Investment Decision (FID) before funds can be secured through a take-or-pay contract. This strategic agreement potentially allows Pantheon to navigate initial capital costs, leading towards greater financial independence. With independently certified contingent recoverable resources estimated at approximately 1.6 billion barrels of ANS crude and 6.6 trillion cubic feet of associated natural gas, the projects under Pantheon’s portfolio promise substantial returns on investment. David Hobbs, Executive Chairman of Pantheon, emphasized the company's commitment to working alongside AGDC and the state's key decision-makers to ensure that local Alaskans benefit optimally from the state's vast gas resources. The swift progress of this project is also significant, considering the lower pre-cash flow funding required due to its proximity to existing transportation infrastructure, which is poised to shorten development timelines and reduce overall infrastructure costs. The region's energy dynamics could shift dramatically with the successful realization of this project, with the aim to produce natural gas into the proposed 807-mile pipeline starting in 2029. Recognition from leading industry experts adds credence to Pantheon’s efforts. Multiple independent evaluations have confirmed substantial contingent recoverable resources within Pantheon’s projects. Their strategic focus on the Ahpun field aims to achieve cash-flow self-sufficiency, especially as they aspire to increase the market recognition of their recoverable resources by the end of 2028. With forthcoming milestones like the FID, the Alaska LNG project has the potential to not only stabilize the state's energy infrastructure but also to enhance the region’s economic prospects amidst fluctuating energy demands in the wider US context.