Glenfarne, Donlin Gold Sign Agreement for Alaska Gas Supply, Pipeline to Mine
Glenfarne and Donlin Gold signed a non-binding LOI to supply natural gas from the Alaska LNG pipeline, including a proposed 315-mile pipeline and power plant to support mine development.
(P&GJ) — Glenfarne Alaska LNG and Donlin Gold LLC have signed a non-binding letter of intent (LOI) to explore supplying natural gas from the proposed Alaska LNG pipeline system to the Donlin Gold mine and developing related pipeline and power infrastructure in Southwest Alaska.
Under the LOI, the companies will work toward a potential gas sales agreement for up to 50 million cubic feet per day and evaluate construction of an approximately 315-mile natural gas pipeline from Southcentral Alaska to the Donlin Gold site, along with a power plant to supply electricity to the mine.
The agreement positions Donlin as a potential anchor customer for the Alaska LNG project, which Glenfarne is advancing in phases to meet in-state demand and support future LNG exports.
“Alaska LNG offers abundant low-cost natural gas that will enhance the economics and facilitate development of energy-intensive mining projects in Alaska,” said Adam Prestidge, president of Glenfarne Alaska LNG. “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.”
Donlin Gold is jointly owned by NOVAGOLD Resources and Paulson Advisers LLC. John Paulson, president of Paulson, said access to Alaska LNG could materially improve the project’s economics.
“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,” Paulson said. “Glenfarne’s global energy experience is well suited to provide a long-term turnkey energy solution that helps advance this opportunity.”
NOVAGOLD President and CEO Greg Lang said the proposed gas supply could have regional benefits beyond the mine itself.
“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,” Lang said. “We look forward to working with Glenfarne to unlock the value of both of these world-class Alaskan resources: Donlin Gold and Alaska LNG.”
Glenfarne is developing Alaska LNG in two financially independent phases. Phase One includes a 765-mile, 42-inch pipeline to move gas from Alaska’s North Slope to domestic markets, while Phase Two would add LNG export facilities with capacity of 20 million tons per year.