BP joins ARCO-led Alaska North Slope LNG sponsor group

Kristen Nelson

PNA News Editor

BP Exploration (Alaska) Inc. has become a 12 percent partner in the Alaska North Slope Liquefied Natural Gas Sponsor Group.

“BP’s extensive North Slope lease holdings and operations as well as worldwide project experience will bring valuable resources to bear on our efforts and is a welcomed addition,” said David Lawrence, board chairman of the sponsor group and ARCO gas manager, in a Jan. 4 statement.

The Alaska North Slope LNG Sponsor Group was formed 14 months ago to develop a commercially competitive Alaska LNG project for the East Asian marketplace. The group is studying the feasibility of a 7 million ton per year LNG export project located on Cook Inlet or in the Port of Valdez, with project enlargement possible when market conditions justify.

“We are very pleased to be part of the sponsor group,” said Ken Konrad, who will lead BP Exploration (Alaska)’s newly formed Alaska gas business unit when the combination with ARCO is completed. “Participation in the effort to develop a competitive Alaska LNG project is consistent with our commitment to pursue all options to commercialize Alaska gas.”

The sponsor group includes ARCO Alaska (approximately 30 percent ownership); Foothills Pipe Lines Ltd. (25 percent); Marubeni Corp. (19 percent); Phillips Petroleum Co. (14 percent) and BP Exploration (Alaska) (12 percent). BP Exploration Alaska will inherit ARCO’s interest in the sponsor group when the proposed combination with ARCO wins regulatory approval.

Original shares in the sponsor group were held by: ARCO Alaska (37 percent); Foothills (22 percent); Marubeni (17 percent); Phillips (12 percent); CSX — parent corporation of Yukon Pacific Corp. (12 percent). Yukon Pacific has dropped out of the project.