Exxon wants more from state of Alaska

Lee Raymond says state gas line negotiators must be 'clear' on 'interaction' between gas and oil operations at Prudhoe Bay

Petroleum News

In testimony on Capitol Hill Nov. 9 regarding oil company profits, ExxonMobil Chairman Lee Raymond said before his company would be willing to participate in building a natural gas pipeline from the North Slope “it is absolutely critical … that all elements be clear and the interaction between gas operations and oil operations at Prudhoe Bay also be clear.”

Raymond was referring to ExxonMobil’s on-going negotiations with Alaska Gov. Frank Murkowski’s administration.

His comments were in response to questions from U.S. Sen. Lisa Murkowski, R-Alaska, who brought up ExxonMobil’s $15 billion commitment for a gas liquefaction project in Qatar.

Raymond also said North Slope gas line negotiations between State of Alaska officials and the big three North Slope oil producers — ExxonMobil, BP and ConocoPhillips — “continue to make progress.

“I think the intent, as we’ve had for a long time, is to come to a successful conclusion, but I think we have to recognize that it would probably be the largest single private project anywhere in the world,” he said.

Sen. Murkowski threatened to move to withdraw some incentives Congress passed to aid the companies unless they moved forward on a pipeline.

She credited ConocoPhillips for reaching agreement on a gas line project with the state and then asked BP and ExxonMobil executives when they expected to reach a similar agreement. Neither company heads offered a specific timeframe.

“We would like to see all the details resolved before we agree to go forward, but we believe this project is a good project, and we believe it will get done shortly,” Ross Pillari, president and CEO of BP America, said.

If the federal government really wants to lower energy costs, Raymond and other oil company executives said, Congress must ease environmental regulations, make it easier to build liquefied natural gas terminals despite local opposition, and must open up more areas of the United States, such as the Arctic National Wildlife Refuge, to oil and gas exploration and development.

If agreement is not reached on a North Slope gas line with the three major North Slope producers or one of the other candidates that is interested in building a gas line by April 13, 2006, the federal government is mandated to do a study of whether or not it should build the gas line.

TransCanada, a major North American pipeline company, and the Alaska Gasline Port Authority have also applied with the State of Alaska under the Alaska Stranded Gas Act to build a gas pipeline from the North Slope. TransCanada and the Murkowski administration reached a conceptual agreement last spring.