ExxonMobil, ConocoPhillips, BP and TransCanada, through its participation in the Alaska Pipeline Project, announced that they are working together on the next generation of resource development in Alaska.
The four companies have agreed on a work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework. Because of a rapidly evolving global market, large-scale liquefied natural gas (LNG) exports from south-central Alaska will be assessed as an alternative to a natural gas pipeline through Alberta.
“Commercializing Alaska natural gas resources will not be easy. There are many challenges and issues that must be resolved, and we cannot do it alone. Unprecedented commitments of capital for gas development will require competitive and stable fiscal terms with the State of Alaska first be established,” the CEOs of ExxonMobil, ConocoPhillips and BP wrote in a joint letter to Governor Sean Parnell.
The producing companies support meaningful Alaska tax reform, such as the legislation introduced by Governor Parnell, which will encourage increased investment and establish an economic foundation for further commercialization of North Slope resources.
With Point Thomson legal issues now settled, the producers are moving forward with the initial development phase of the Point Thomson project. Alaska’s North Slope holds more than 35 trillion cubic feet of discovered natural gas, and Point Thomson is a strategic investment to position Alaska gas commercialization.
- Alaska Governor, BP, Conoco and Exxon Discuss LNG Export (mb50.wordpress.com)
- Alaska champions $40bn pipeline plan (mb50.wordpress.com)
- Alaska settles pipeline suit with oil companies (business.financialpost.com)
- Alaska export plan collapses (mb50.wordpress.com)
- Alaska Natural Gas Pipeline Back on Front Burner (BP, XOM, COP) (247wallst.com)
By Ed Crooks in London
BP, ExxonMobil and ConocoPhillips are in discussions about a $40bn project to export liquefied natural gas from Alaska to Asia, potentially opening up large but stranded reserves that currently have no route to market.
According to people close to the negotiations, the three companies and state authorities hope to reach agreement next week over a long-running lease dispute at Point Thomson, a large oil and gas field on Alaska’s North Slope.
A settlement would clear the way for the companies to hasten their commercial assessment of a large gas pipeline to Alaska’s southern coast, from where LNG could be shipped to China and other Asian countries. Sean Parnell, Alaska’s governor and a champion of the project, told the Financial Times he was “cautiously optimistic” that the plan would be able to move forward.
The state argues that BP, ExxonMobil, ConocoPhillips and Chevron have been too slow to produce oil and gas at Point Thomson, having agreed to a development plan in 1977, and he wants to take their lease away. John Minge, BP’s president for exploration in Alaska, told reporters in the state last week that talks about the dispute were on track to be resolved by an end of March deadline.
Alaska’s North Slope has proven reserves of 35tn cubic feet of gas – about one-eighth of US total reserves – and undiscovered resources estimated at 236tn cu ft. Without a pipeline, however, the gas is worthless.
Exxon and TransCanada, a pipeline company, have been working on a route to take the gas across Canada to the “lower 48” US states, but industry executives and government officials say the proposal was stymied by weak prices stemming from the shale gas boom.
Mr Parnell said Alaska was frustrated by the slow progress of plans to develop the gas, which could earn the state an estimated $400bn. He has been urging the companies to move forward with a shorter pipeline to the south coast of Alaska, where a new LNG plant could be built for export to Asia. “The gas is there, the market is there, particularly on the Pacific Rim,” he said. “There is no reason why we should not be able to move the gas to the market.”
The companies have warned that they need to assess the commercial case for the project, which would cost an estimated $40bn-$50bn and take at least 10 years to develop.
Governor Sean Parnell met yesterday in Anchorage with the chief executive officers from BP, ConocoPhillips and Exxon Mobil to discuss alignment between the three companies on commercializing the North Slope’s vast natural gas reserves.
The meeting took place at the request of Governor Parnell after he publicly called on the three companies – the major lease holders for gas reserves on the North Slope – to work together on developing a liquefied natural gas (LNG) project that focuses on exporting Alaska North Slope gas to Asia’s growing markets.
“We had a productive discussion about how to get alignment between the companies and grow Alaska’s economy through oil and gas development,” Governor Parnell said. “I made it clear that we want to see progress on commercializing Alaska’s gas for Alaskans and markets beyond.”
The Parnell administration is targeting LNG exports to Asia given increasing demand there.
Governor Parnell and the CEOs – Bob Dudley of BP, Jim Mulva of ConocoPhillips and Rex Tillerson of Exxon Mobil – met for two hours. During the meeting, the CEOs briefed the governor on the extensive work they’ve been doing in response to his request.
“I appreciate the willingness of the chief executives to come to Alaska to discuss the important topic of commercializing North Slope gas,” Governor Parnell said. “For a gas project to advance, all three companies need to be aligned behind it. This meeting is an important step, but much work remains.”
- BP, ConocoPhillips JV Drops Alaska Gas Pipeline Project
- GVEA, Flint Hills Resources Alaska Sign MOU on LNG Project (USA)
- Alaska Governor Backs LNG Plan
- Alaska Delegation Supports ConocoPhillips Kenai LNG Permit Extension
- Alaska LNG Terminal Exported One Cargo in November
- Alaska discusses laternatives to TransCanada pipeline (business.financialpost.com)
- Oil executives meet with Alaska gov. on pipeline (seattletimes.nwsource.com)
- Alaska export plan collapses (mb50.wordpress.com)
- ExxonMobil Eyes North American LNG Exports (mb50.wordpress.com)
- USA: Seventeen LNG Cargoes Re-Exported in Jan-Nov (mb50.wordpress.com)
- Angola LNG Looks to Sell Liquefied Natural Gas to Non-U.S. Buyers (mb50.wordpress.com)
- Alaska governor revamps gas pipeline pitch (seattletimes.nwsource.com)
Posted on May 2, 2011 at 11:33 am by jenniferdlouhy
Governors from Alaska and states bordering the Gulf of Mexico are reaching out to their counterparts along the West and East Coast today in a bid to get them more involved in decisions about energy production offshore.
The push for a new Outer Continental Shelf Governors Coalition is led by four governors who know a little something about oil and gas production offshore: Rick Perry of Texas, Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Sean Parnell of Alaska.
In an invitation to other coastal state governors, the foursome said they hoped the coalition would “foster an appropriate dialogue between the coastal states and the administration” about offshore drilling. The group would give the governors a vehicle to lobby for expanded drilling offshore.
“All federal decisions regarding exploration and production must be made in consultation with affected states,” the four governors said. “In recent months, however, the federal government has taken sweeping actions regarding offshore oil and gas activities with little consultation with the states.”
And too often, they say, those decisions have conflicted with the states’ best interests.
For instance, Gulf Coast governors who signed the letter have protested the administration’s decision to halt deep-water drilling after last year’s oil spill and to postpone some sales of offshore drilling leases. And Virginia state leaders were upset by the Obama administration’s move to cancel a lease sale off their coastline.
Representatives from Louisiana, Texas and other states are set to announce the new group during a session this afternoon at the Offshore Technology Conference in Houston.
David Holt, president of the Consumer Energy Alliance and a FuelFix guest blogger, said the move would allow the governors to better communicate “the need to produce American energy offshore, not only for their individual states, but for the entire nation.”
Visit FuelFix this week for the latest news from OTC. You can also like our page on Facebook or follow @FuelFixBlog on Twitter. Look for updates from reporters @houstonfowler and @jendlouhyhc under the #OTCHouston hashtag.