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Monday, February 19 2018 @ 12:46 AM AKST

BP and ConocoPhillips Commit Gas to AK LNG

EnergyOctober 23, 2015 JUNEAU—Governor Bill Walker today announced a breakthrough in Alaska LNG Project negotiations with ConocoPhillips and BP. Both companies provided Governor Walker with written assurances they will commit to a process to make available their share of Alaska’s North Slope gas to a future gas pipeline project. Because of this commitment by ConocoPhillips and BP, Governor Walker said he will not introduce a bill during this special session proposing a property tax on gas leases within the Prudhoe Bay and Point Thomson units. A gas commitment to an Alaska gas project will endure should either producer withdraw from the current AKLNG Project or the AKLNG Project fails to move ahead.

“It is important that Alaska act like the owner state it is,” Governor Walker said. “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.”

In addition, the State, ConocoPhillips and BP have agreed to complete the project continuity and gas sale terms by early December.

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

The commitment Governor Walker received from ConocoPhillips and BP means AKLNG will progress, but should either company decide to pull out of the project, the gas will still be made available for a project. Having the Prudhoe Bay and Point Thomson gas commitment will significantly enhance the ability to finance and build an Alaska liquefied natural gas project.

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

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