Stranded gas negotiations under way

Kristen Nelson, Petroleum News editor-in-chief

Negotiators for the state of Alaska have met with North Slope gas producers to begin negotiating a contract in lieu of taxes for North Slope natural gas.

Alaska Deputy Commissioner of Revenue Steve Porter said the state met with the gas producers July 23 to begin stranded gas negotiations. The commissioners of Natural Resources and Revenue and the attorney general attended, as did representatives of BP Exploration (Alaska), ConocoPhillips Alaska and ExxonMobil Production. Porter told the board of the Alaska Natural Gas Development Authority July 28 that the July 23 meeting was to provide clarification to the producers about what is required for an application under the Alaska Stranded Gas Development Act, reauthorized and amended by the Legislature earlier this year.

There have been some informal meetings, he said, and a preliminary meeting, but July 23 was the first full meeting. Porter declined to name the members of the state’s negotiating team, saying he didn’t think that information had been made public yet, but he said the team includes the departments of Law, Natural Resources and Revenue. The state work team has been meeting on a regular basis.

Porter said industry has been drafting an application for some time, and the state expects to receive an application within two to three weeks. That application will be a public document, which the state will post on its web page, he said.

The Alaska Stranded Gas Development Act allows the state “broad ability to examine different kinds of take, different types of taxes,” Porter said and to negotiate with the producers. The negotiated contract will be in lieu of taxes and will require the approval of the Legislature.