State receives four offers for royalty-in-kind natural gas

Kristen Nelson

The state of Alaska has received four offers to buy North Slope royalty-in-kind natural gas.

At a bid opening Feb. 1, Commissioner of Natural Resources Pat Pourchot said the proposals were from Alaska Power and Telephone Co. in Tok; Anadarko Petroleum Corp. and AEC Oil and Gas (USA) Inc. and AEC Marketing (USA) Inc. — a joint proposal; Chevron U.S.A. Inc.; and Williams Energy Marketing and Trading Co.

Kevin Banks, petroleum market analyst with DNR’s Division of Oil and Gas, said before the bid opening that analysis of the proposals would begin right away. The commissioner will then determine whether to negotiate with any of the companies making offers and then to craft contracts based on the proposals, Banks said.

A finding of best interest would then be issued for public review and review by the Royalty Oil and Gas Development Advisory Board. After a final finding is completed, the contract would be submitted to the Legislature.

Commissioner Pourchot said after reading the names of those submitting bids that the state has not yet made any decisions to proceed. The process is being taken step by step, with action taken only when the next step is seen as in the best interests of the state, he said. The next step will be analyzing the proposals.

The state offered 70 percent of its Prudhoe Bay and Point Thomson royalty gas Dec. 26, saying that selling royalty gas now “responds to a commercial opportunity” to improve future royalty revenues from natural gas and to promote new private investment.