BP PLC and ConocoPhillips’s Alaskan subsidiaries provided written assurances that they will commit their shares of Alaska North Slope natural gas to a future pipeline project, Gov. Bill Walker (I) announced in Juneau. Consequently, he will not introduce property tax legislation on gas leases within the Prudhoe Bay and Point Thomson units during the current special legislative session, the governor said on Oct. 23.
Each company’s primary focus remains on the Alaska LNG Project, BP Exploration (Alaska) Inc. Pres. Janet L. Weiss and ConocoPhillips Alaska Pres. Joe Marushack separately indicated in their letters to Walker. But the two subsidiary leaders each added that their company’s gas would be available to a future Alaska pipeline project on mutually agreeable commercial terms if the one that currently is proposed does not move ahead or the company withdraws from it.
“It is important that Alaska act like the owner state it is,” 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 now have demonstrated their commitment to make their gas available for an Alaska project.”
He said that BP and ConocoPhillips also agreed to complete the Alaska LNG Project’s 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,” Walker said. “Based on a call I received today from ExxonMobil, I am hopeful they will join ConocoPhillips and BP with a similar commitment.”
The governor’s announcement came the day before the state’s legislature began a special session concerning the project that he ordered on Sept. 24 (OGJ Online, Sept. 25, 2015). The session’s focus reportedly has narrowed to buying out TransCanada Corp.’s interest in the proposed $45-65 billion project that would be the largest single investment in Alaska in the state’s history.
Contact Nick Snow at firstname.lastname@example.org.