NEWS BULLETIN

October 27, 2011 --- Vol. 17, No. 93October 2011

Parnell wants ANS natural gas to go to Pacific Rim as LNG

Alaska Gov. Sean Parnell told the Alaska Oil and Gas Association annual luncheon today that there needs to be greater alignment among shippers of gas and said that alignment should be for a line going to tidewater, with natural gas going to the Pacific Rim as liquefied natural gas.

Negotiations with shippers by TransCanada and ExxonMobil under the Alaska Gasline Inducement Act don’t appear to be moving forward, Parnell said: There is no commercial alignment.

The problem may be that the market for natural gas has shifted since AGIA was passed, due to the glut of natural gas in the Lower 48, “the devastating tsunami in Japan and that nation’s subsequent shift away from nuclear power, and other market forces in the Pacific Rim.”

“It all means that a better market for Alaska gas could very well be in Pacific Rim countries,” he said.

And AGIA allows for reassessment of market conditions, he said.

Parnell said that recently he has talked with TransCanada, ExxonMobil, BP, ConocoPhillips and the Alaska Gasline Development Corp.

He said he told them there appears to be an impasse on a line to the Lower 48 and “I asked them to move forward on a large-diameter LNG pipeline to tidewater in Alaska.”

If market demand has shifted to the Pacific Rim, Alaska needs to shift, too, he said.

And, he said, a greater alignment leads to fiscal terms, a reference to statements he had made in the past that he won’t negotiate separately with the players, but only with a project.

He said it’s time to unleash Alaska’s resources with meaningful tax changes, resolution of the Point Thomson issues and a new direction for the gas pipeline.

—Kristen Nelson


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