STAK Energy and ExxonMobil Alaska Production have signed a 15-year Gas Sale Agreement for Project Aaka campus. The contract provides gas to a new power plant on Alaska’s North Slope. The signing makes a precedent agreement in January a binding commercial contract. It also opens up a commercial route for gas that has been stranded for 50 years.
Project Aaka is an advanced computing and power campus being planned by STAK Energy in an existing industrial corridor in the North Slope. The dedicated electricity generation will be provided by on-site gas turbines, which will run completely off-grid, with a capacity of almost 3 GW. The company expects no disruption to Alaska’s public electric grid or ratepayers. The release does not reveal any project cost.
Sparrow Mahoney, founder and CEO of STAK Energy, said that the North Slope has been producing gas for 50 years with no way to use it at scale. Today, that’s changing, and our agreement makes it even more compelling to bring more power, and lower energy costs, home to Alaska families.
Other Projects
Alaska LNG pipeline project is a natural gas infrastructure development designed to transport North Slope gas across Alaska to domestic markets and, in later phases, to an export terminal on the southern coast. The project is centered on a long-distance, high-capacity transmission pipeline and associated compression and gas treatment facilities. Alaska LNG also aims to unlock stranded Arctic gas resources while strengthening the region’s energy security. The billion-dollar scheme is also looking to lower fuel costs for Alaskan consumers and establish a pathway to future LNG exports. All this is however subject to commercial, regulatory, and market winds, with the latest blow pushing for the sails as phase one of the Alaska LNG Project moves from development into early execution.
Scope of implementation on the Project Aaka power campus
The campus site offers year-round road and airport access. Large-scale advanced computing and AI workloads will be powered by high-efficiency gas turbines behind the meter. The project also is expected to reduce energy costs for nearby North Slope infrastructure. Operators there currently pay a premium for power.
The schedule includes first power in 2030 and phased expansion to 2032. In addition to the compute load, there’s a fiscal angle to the deal. The sale of the gas should create new state and local tax revenue, as should the power plant.
The size of the deal is not as important as the structure. ExxonMobil agrees to supply for 15 years, and STAK agrees to purchase. That certainty converts stranded associated gas into fuel for a contracted power plant. The gas had been flared or reinjected for lack of a buyer for a long time.
Challenges facing the Project Aaka power campus
The build is familiar with the North Slope risks. The construction windows in the Arctic are short and large gas-turbine plants require modular delivery. The 2030 first-power target thus provides about four years for engineering, procurement and installation. The company has also failed to identify its computing customers, its turbine supplier or a capital budget.
Despite this, the site mitigates some risks. There is an existing industrial corridor with roads, an airport and nearby infrastructure that require lower cost power. Off-grid operation avoids interconnection queues altogether, and the 15-year term of the agreement provides lenders with a guaranteed revenue stream.
Mahoney also put the project in Alaska’s infrastructure tradition, along with the Trans-Alaska Pipeline System. At a time when the nation desperately needs more power, Alaska has the land, the resources and the will to deliver it again, she said.
Project Overview
- Project Value: Not disclosed
- Location: North Slope industrial corridor, Alaska
- Developer: STAK Energy Corporation
- Gas Supplier: ExxonMobil Alaska Production
- Status: 15-year gas agreement signed
Scope
- Nearly 3 GW behind-the-meter power
- High-efficiency on-site gas turbines
- Advanced computing and AI workloads
- Fully off-grid operation
Project Highlights
- Unlocks 50 years of stranded gas
- Zero grid or ratepayer impact
- Year-round road and airport access
- Lowers costs for nearby infrastructure
Key Developments
- Precedent agreement signed January
- 15-year contract completed this week
- First power targeted 2030
- Phased expansion runs to 2032
Key Challenges
- Arctic construction windows are short
- Computing customers still unnamed
- Turbine supplier not announced
- Capital budget not disclosed
Outlook
- First power due 2030
- Expansion phases run through 2032
- New state and local tax revenue
- Model for stranded North Slope gas
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