Gov. Walker: Alaska LNG project gains certainty

Alaska governor Bill Walker said a positive step has been made in Alaska LNG project negotiations with oil and gas giants 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, the governor said in a statement issued late Friday.

Because of this commitment by ConocoPhillips and BP, governor Walker said he will not introduce a bill 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 Alaska LNG project or the AKLNG project fails to move ahead.

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.”

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 substantially similar project.

Governor Walker added that having the Prudhoe Bay and Point Thomson gas commitment will enhance the ability to finance and build an Alaska liquefied natural gas project.

Image: gov.alaska.gov