Exxon and BP agree to partially fund permit for LNG project

ANCHORAGE (KTUU) - There's a lot of optimism and confidence in the future of Alaska's oil and gas industry based on new discoveries on the North Slope -- and two oil companies are back on board with the LNG project.

The Alaska Oil and Gas Association Conference got underway Thursday in Anchorage, and in line with this year's theme, industry leaders say Alaska is 'back on the map'. New discoveries by ConocoPhillips and Oil Search on the North Slope are creating a lot of optimism moving forward.

"We drilled six wells out there this year. We drilled about six wells the year before. We've tested them. We put 147 miles of ice roads in order to do this work," said Joe Marushack, President of ConocoPhillips Alaska. "So, it's a very very active drilling season for us this year."

"Ironically, these are in areas where companies have been drilling wells for years, and coming up with dry holes," said Tim Bradner, co-editor of the Alaska Economic Report. "These two companies using new technologies have gone in and found a lot of new oil."

Brader is a long time journalist who covers the oil and gas industry. He says that optimism is what's likely drawn BP and Exxon back to the Alaska LNG project.

At the conference, Lt. Gov. Kevin Meyer announced both companies have agreed to fund two thirds of the cost to get the Federal Energy Regulatory Commission permit for the project. It's $10-million each, and the state will have to front the remaining $10 million.

"I think they are like us in that if it doesn't make economic sense, we're not going to do it, but we might as well go and get that permit so that if and once it does become economical, you're ready to go, and you're not having to spend another two or three years and I don't know how many millions getting that FERC permit," said Lt. Gov. Meyer.

The LNG project isn't yet a fully committed project. Getting the FERC permit is only one step in that process. The thought now is that with this additional influx of money from Exxon and BP, they're hoping to be able to get that permit within a year.

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