Port authority opposes 23rd plan of development

The Alaska Gasline Port Authority told the Department of Natural Resources March 3 that it believes termination of the Point Thomson Unit “is an appropriate remedy” to the owners’ failure to meet drilling commitments.

Craig Richards of Walker & Levesque LLC, representing the port authority, told DNR Commissioner Tom Irwin and hearing officer Nan Thompson that the port authority’s involvement stems from its 2005 efforts to purchase Point Thomson gas from unit owners. Richards said after “effectively” receiving no response the port authority started to look at why gas sales were not occurring from Point Thomson.

The hearing was in response to Alaska Superior Court Judge Sharon Gleason’s order that DNR allow the Point Thomson Unit owners an opportunity to suggest remedies other than termination for failure to submit an acceptable 22nd plan of development for the unit.

DNR is hearing a proposed multiyear 23rd plan of development. Richards said the port authority does not believe that a multiyear plan of development is appropriate “given the unit’s history and DNR’s stated policy of regulating periodic plans of development to ensure unit oversight on the North Slope.”

He said that in light of the Point Thomson Unit’s history, “mainly failure to meet the 1984 and 2002 expansion commitments and drilling … (and) the unit operator’s failure to undertake all of the promises made towards completion of a gas cycling project, including permitting,” the port authority believes a one-year plan of development should be in place “so that DNR has the authority to oversee rapid unit development.”

Issue of gas marketing

The 23rd plan of development does not address gas marketing, Richards said. He said “there has been a long-demonstrated history at Point Thomson of third parties coming in and trying to build a gas pipeline in the state and the producer being unwilling to market gas to those independent operators” — the port authority being one of those pipeline projects.

The port authority made an offer to buy Point Thomson gas in 2005, he said, and “made it clear that we’d be willing to purchase gas on whatever terms were offered; no terms were forthcoming.”

Richards said the port authority would like to see a “commitment to diligently market gas” made by all of the working interest owners at the hearings.

He urged Irwin and Thompson to “press and press very hard to find out not only historically what opportunities they’ve foregone to market gas, but looking forward, what are they going to do to market gas from this unit.”

—Kristen Nelson