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BP, Exxon back
Companies agree to work collaboratively with AGDC on ways to advance AKLNG
Kristen Nelson Petroleum News
The Alaska Gasline Development Corp. said in a March 8 statement that it has signed an Alaska LNG collaboration agreement with BP and ExxonMobil.
The companies had previously signed gas sales precedent agreements with AGDC (BP last May and ExxonMobil last September), but had not been directly involved since the state took over the Alaska LNG project from the joint team, which also included ConocoPhillips, in 2016. AGDC has said in recent board meetings that it is working with ConocoPhillips on a gas sales agreement.
AGDC said in the March statement that it had “signed an agreement with BP and ExxonMobil to collaborate on ways to advance the Alaska LNG project by working together to identify ways to improve the project’s competitiveness, and progress the Federal Energy Regulatory Commission authorization to construct the project.”
“Our respective organizations share an interest in the successful commercialization of Alaska’s stranded North Slope natural gas. BP and ExxonMobil possess world-class LNG expertise which may help AGDC responsibly advance this project with maximum efficiency for the benefit of Alaskans, and I welcome their collaboration,” AGDC Interim President Joe Dubler said in the statement.
“We remain committed to supporting a way forward for Alaska LNG,” BP Alaska spokeswoman Megan Baldino told Petroleum News March 11. “We’ve been engaged with the new administration and AGDC to understand their priorities and this agreement or MOU formalizes our intent to share our international LNG expertise with AGDC.”
Idea floated in January This possibility of reengaging with the North Slope producers in the Alaska LNG project has been on the table since January, when Bruce Tangeman, Revenue commissioner for the new administration, told The Alaska Support Alliance Meet Alaska conference that there have been changes at AGDC and said it was a good time “to pause and see exactly where we’re at in this process.”
He said the governor was not comfortable with changes made under the last administration which brought 100 percent of the project risk inhouse to the state, and said it was important to bring partners back in and share the first if the project is to move forward.
Earlier in January Gov. Mike Dunleavy, who took office in December, replaced two public members of the AGDC board (members, who require legislative confirmation, serve at the pleasure of the governor).
The new board relieved former AGDC President Keith Meyer of his position and installed Joe Dubler, formerly on AGDC’s executive team, as interim president.
Under Gov. Bill Walker AGDC had taken over leadership of AKLNG when the state’s industry partners - BP, ConocoPhillips and ExxonMobil - declined to move the project forward from pre-front-end engineering design to FEED.
AGDC then pursued a strategy based on viewing the project as infrastructure and struck a preliminary deal with Chinese firms which would have had 75 percent of the LNG from the project going to China.
Collaboration agreement Tangeman told Meet Alaska in mid-January that this was a good chance to reach out to the state’s former partners for their views on the LNG market and to get their expertise.
Tangeman was involved in earlier phases of AKLNG and said it is a great comfort to the state to have partners who had built such projects around the world, and said the state was going to get to a successful project based on industry experience.
And he focused on a stage-gate approach, not a schedule-driven project.
Talking about the earlier joint venture, Tangeman said the goal was a profitable economic driven project, not a schedule driven project.
Because the early project was stage-gate driven, with legislative approval needed to move forward, the Legislature was involved. Unfortunately, Tangeman told Meet Alaska, it’s been several years since there has been a stage-gate process discussion and the Legislature has been really set aside.
He said the administration looks forward to reengaging with its partners on the North Slope and would be discussing the project with them to determine if there is an appetite to reengage and move forward as a partnership again.
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