|
Alaska governor sets out gas line path Parnell concedes oil companies have not agreed to his ‘roadmap,’ but says it’s important to lay down reasonable expectations Wesley Loy For Petroleum News
Gov. Sean Parnell, in his recent State of the State speech to the Alaska Legislature, laid out some rather specific steps for oil companies and the state to take over the next year in the continuing quest for a natural gas pipeline.
What does the governor’s schedule mean?
In concrete terms, not very much. Parnell acknowledges the oil companies, who control most of the gas on Alaska’s North Slope, haven’t agreed to his timeline.
At a press conference on Jan. 19, the day after his speech, Parnell told reporters he’d set out the schedule because “I think Alaskans are tired of waiting – I'm tired of waiting – for gas.”
He said he wanted to “set the expectations out there” as to what Alaskans reasonably should see from the companies.
Governor’s timeline Parnell is the latest in a string of Alaska governors who have tried to land an Alaska natural gas pipeline to complement the 800-mile oil pipeline that went into operation in 1977 and transformed the state’s economy.
For decades, the extraordinary cost of a gas line has precluded its construction. While from time to time prospects for the megaproject seem to improve, lately optimism has dimmed amid swelling U.S. gas supplies and weak prices.
While a partnership of TransCanada and ExxonMobil have a proposal on the table to build a gas line into the North American market, Parnell recently has asked the major North Slope oil companies to also look at the possibility that liquefying Alaska gas to serve Asian markets might be a better option.
He has urged the oil companies to “align” behind a project. And soon.
In his State of the State speech, he laid out an aggressive “roadmap” to a gas line:
• First, the companies need to agree to resolve the Point Thomson litigation. Point Thomson is an undeveloped North Slope field containing about a quarter of the Slope’s known 35 trillion cubic feet of natural gas. The Point Thomson reserves are regarded as important for supporting a gas line, but right now the field is under a legal cloud because of state efforts to reclaim the acreage for lack of development — a move the oil companies are fighting in court. In recent months, the Parnell administration reached a settlement with the field’s operator, ExxonMobil. But to Parnell’s dismay, ExxonMobil’s partners in the field — BP, Chevron and ConocoPhillips — have yet to join the deal.
• During the first quarter of 2012, Parnell said, “Alaska expects these producers to formally align under an Alaska Gasline Inducement Act framework.” The state Legislature passed the act, known as AGIA, in 2007 at the behest of former Gov. Sarah Palin. TransCanada is receiving state subsidies under AGIA to pursue its pipeline project, but generally the oil companies dislike the act.
• By the third quarter of 2012, Parnell said he wants the parties aligned on an AGIA project to “complete discussions” on whether that project can be consolidated with a separate venture the Alaska Gasline Development Corp., a state agency, is pursuing to pipe North Slope gas for in-state consumption.
• Also by the third quarter of 2012, the governor said, “Alaska expects the companies to harden their numbers on an Alaska liquefied natural gas project. By that time, they will identify a pipeline project with an associated work schedule.”
• Finally, if these milestones are met, the 2013 Legislature “can take up gas tax legislation designed to move the project forward,” Parnell said.
Companies respond Petroleum News asked spokespersons for the major North Slope oil companies to comment on Parnell’s gas line agenda. Each sent brief remarks via email.
“ExxonMobil is committed to Point Thomson development,” said David Eglinton, of ExxonMobil. “Settling Point Thomson is a critical first step to commercializing Alaska North Slope gas. ExxonMobil has worked with the State of Alaska to agree on a settlement plan. Our teams are now actively engaged in finalizing this challenging issue.”
“We are working diligently to address the pertinent issues,” said Amy Burnett, of ConocoPhillips “We appreciate the Governor’s leadership and his support and advocacy for development of Alaska’s significant resource base including North Slope natural gas.”
“BP and the other companies share the desire for a successful project, including finding a mutually agreeable resolution of Point Thomson,” said Steve Rinehart, of BP. “This is a challenging issue which our teams are actively working to resolve. Alaska gas is a world-class resource and is important to BP. We support Gov. Parnell’s vision for Alaska oil and gas development and believe that an LNG option to deliver Alaska gas to global markets could be competitive. Successful delivery at this scale requires all interested parties to work together.”
| 