Alaska Gov. Sean Parnell said during his state of the state address Wednesday he wants backers of in-state and Lower 48-bound gasline plans to “consolidate their efforts” and said the state and North Slope producers need to settle their differences on leases.
Before Alaska can commercialize its estimated 200 Tcf of gas reserves it needs a gasline, something it has sought for decades. Alaska is supporting a project under the Alaska Gasline Inducement Act (AGIA) to carry gas to Canada and the Lower 48 states and another project under the Alaska Gasline Development Corp. (AGDC) to develop a pipeline to meet in-state needs.
“While both are making progress, neither can finish the job alone,” Parnell said.
“Teams from the companies have been working diligently to align on a gas project. Our state teams in the Department of Natural Resources and the Department of Law have worked very hard as well to resolve outstanding litigation issues. Within the last 24 hours, I have talked with all three [producing company] CEOs again to get a progress report…[A]greement on key issues has not yet been reached.”
To move forward, Parnell called on producers to resolve litigation over Point Thomson leases with the state. Point Thomson is thought to hold one-quarter of the North Slope’s natural gas reserves. Alaska has maintained that operator ExxonMobil Corp. has dragged its feet on developing the resource. “If no settlement in the state’s interest can be reached with all parties, the state will fight for Alaska’s interests at the Alaska Supreme Court hearing on Feb. 8 in Anchorage,” he said.
BP plc, ConocoPhillips and ExxonMobil are expected by Parnell to come together under AGIA during this quarter. Heretofore, BP and ConocoPhillips had pursued and abandoned Denali: The Natural Gas Pipeline (see Daily GPI, May 18, 2011), and ExxonMobil has signed on with TransCanada Corp. to develop a pipeline under AGIA (see Daily GPI, Jan. 18).
When the trio comes together, it must include work on a large-diameter liquefied natural gas (LNG) line through Alaska to tidewater, the governor said. Earlier this month Parnell discussed with the heads of the three producers the potential for liquefying Alaska gas and exporting it to Asian markets (see Daily GPI, Jan. 9).
“By third quarter of 2012 the two projects — one under the Alaska Gasline Inducement Act with the aligned parties and the other under the Alaska Gasline Development Corp. — will complete discussions determining what potential exists to consolidate projects,” Parnell said. “The AGDC…is already engaged in an environmental impact statement process for an in-state gasline route to Tidewater, and the AGDC has a 417-mile state right-of-way in hand, assets useful in a consolidated project.”
Also by the third quarter Parnell said he wants companies “to harden their numbers” on an LNG export project.
“If these milestones are timely met, the 2013 legislature can take up gas tax legislation designed to move the project forward,” he said.
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