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BP and ConocoPhillips commit gas to the Alaska LNG project

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LNG Industry,

The Governor of Alaska, Bill Walker, has announced that a breakthrough has occurred in the discussions over the Alaska LNG Project with ConocoPhillips and BP. Both BP and ConocoPhillips have now written assurances stating that they will commit to making their share of the Alaskan North Slop gas available to a gas pipeline project in the future. In addition, they have agreed to complete the project continuity and gas sale terms by December 2015. Should the Alaska LNG project fail to proceed, or either producer withdraws from the project, a gas commitment to the project will endure. As a result, Walker has claimed that he will not develop a bill to propose property tax on gas leases in the Prudhoe Bay and Point Thomson units.

Walker said in a statement: “It is important that Alaska acts like the owner state it is […] The reserves tax proposal is appropriate leverage for Alaska in response to a situation where known, producible gas could be withheld from a state project because it does not meet the commercial strategy of a particular producer. I am pleased BP and ConocoPhillips have now demonstrated their commitment to make their gas available for an Alaska project.

“The continuity agreement will contain specific dates for the completion of the various commercial agreements that will enable this project to move forward.

“I thank ConocoPhillips and BP for their commitment to address the state’s legitimate concerns regarding the assurance of a gas supply.

“I look forward to achieving the completion of the commercial agreements that will underpin the state’s fiscal commitments. Based on a call I received today from ExxonMobil, I am hopeful they will join ConocoPhillips and BP with a similar commitment.”

Edited from press release by David Rowlands

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