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Image courtesy of Alaska LNG.

ExxonMobil has reportedly backed out of the Alaska LNG project and will seek a buyer for its stake.

According to the Wall Street Journal, Exxon has decided to not invest in the front-end engineering and design (FEED) phase for the $65 billion Alaska LNG project.

The company is also reportedly looking to sell its stake to the Alaskan government, citing a “misalignment” between the other stake holders and the state’s government.

According to Platts, the project’s managers told the Alaska legislature last week that the terminal remains uneconomical at current commodity prices despite costs being trimmed by about 20 percent.

According to the Alaska Dispatch NewsConocoPhillips and BP have indicated that they may not immediately move forward with the project’s FEED phase. 

The FEED phase was expected to start in 2017 and was projected to cost as much as $2 billion, the Alaska Dispatch News said.

According to Platts, BP regional manager Dave van Tuyl told the Alaska legislature that although the companies have made “a lot of progress in driving down costs…it isn’t enough the make the project economic.”

That analysis was repeated by a Wood Mackenzie analyst who told the legislature that the project would be the least competitive of the major LNG projects currently being planned.

Preliminary engineering for the Alaska LNG project is about 95 percent complete and will be finished sometime in September, Platts said.

A senior commercial adviser for the project told the legislators that Exxon is still open to supplying the project with gas from the North Slope if the project moves forward, the Wall Street Journal said.

ConocoPhillips project integration manager for Alaska LNG Darren Meznarich added that his firm is “unlikely at this point” to directly participate in the FEED phase due to “significant economic headwinds,” the Journal added.

The proposed project facilities include a liquefaction facility in the Nikiski area on the Kenai Peninsula, an 800 mile pipeline, up to eight compression stations, at least five take-off points for in-state gas delivery, a gas treatment plant located on the North Slope and transmission lines to transport gas from Prudhoe Bay and Point Thomson to the gas treatment plant.