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Governor: Gasline contract still possible this session TransCanada right of way would not be exclusive, Alaska Gov. Frank Murkowski says; North Slope Point Thomson unit also an issue Kristen Nelson Petroleum News Editor-in-Chief
Alaska Gov. Frank Murkowski told reporters Feb. 17 that he believes the administration’s negotiating team has a chance to get a contract to the Legislature this year.
The state is negotiating gas pipeline fiscal certainty with the North Slope producers (BP, ConocoPhillips and ExxonMobil) and with TransCanada, a pipeline company. It is also in discussions with, Enbridge, another pipeline company; Enbridge has not entered formal negotiations with the state, saying that it prefers to work with the producers.
The state is also working with the Alaska Gasline Port Authority on that entity’s proposed liquefied natural gas project to the West Coast, and with the Alaska Natural Gas Development Authority, a state entity which has an LNG proposal but is currently focused on in-state spur pipelines.
Murkowski said he got a briefing on the negotiations in mid-February, and the issues are complex.
The state is negotiating equity participation in exchange for severance and ownership with the producers and there are “concerns of just how equity participation by the state would be allocated in the sense of percent of ownership,” he said. The state is negotiating some broad ranges of ownership, and that has to be compared with the status quo: “where we would be if we were proposing to have the standard revenue stream coming in from the royalties and severance taxes.” Point Thomson, right of way issues There are other issues, the governor said, “such as Point Thomson, which is a very, very tough question that involves one of the producers, their interest in certain commitments made to the state to develop.”
The governor did not elaborate on Point Thomson.
ExxonMobil is the Point Thomson operator, and under terms of a 2001 unit expansion agreement, development drilling must begin by June 15, 2006, or the state pockets $20 million. But the Point Thomson owners have said recently that they have been unable to identify an economic project at Point Thomson, an undeveloped high-pressure condensate field on the eastern edge of North Slope state lands adjacent to the Arctic National Wildlife Refuge. ExxonMobil told the state in late 2004 that “a standalone project prior to gas sales is not economically viable under the current fiscal system.”
The governor also mentioned TransCanada’s right of way application, noting “concerns expressed by the producers that this would be exclusive.”
The governor said that is not the case: “It’s our intent that any consideration would be non-exclusive and I don’t know why we can’t seem to get a dictionary definition…”
The governor said he would be discussing the gas line with both Enbridge and TransCanada on a trip to Ottawa, as well as having discussions with the Canadian government.
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