BP Alaska signs onto the Alaska LNG Project in a 'historic milestone'

By  | 

ANCHORAGE (KTUU) - A gas sales agreement between BP Alaska and the state is being touted as 'a historic milestone' in the decades-long effort to construct a natural gas pipeline from the North Slope for sale abroad.

Keith Meyer, the executive director of the Alaska Gasline Development Corp., said the parties had agreed to key terms namely, price and volume, “which are the two big significant components of any sales agreement.”

BP Alaska’s Chief Executive, Bob Dudley, was quoted in an AGDC press release saying that the company is “pleased to be part of the State’s vision to bring Alaskan natural gas to new and expanding markets globally. We think this is good for the State, good for BP and good for the environment.”

The gas sales precedent agreement was signed May 4.

The project would see an estimated 30 trillion cubic feet (TCF) of gas from Prudhoe Bay, taken down to Nikiski through an 800 mile pipeline and turned into Liquid Natural Gas (LNG) at a plant before being shipped overseas.

Meyer said similar gas sale agreement negotiations were ongoing with other major North Slope suppliers that the AGDC hoped to conclude soon. “We’re saying weeks, months but not longer than months.”

He said the specifics of the deal with BP Alaska were not being released as the other negotiations continued.

Mike Navarre, the Alaska Commerce Commissioner, spoke at Anchorage’s Make it Monday Forum about Gov. Walker’s upcoming trip to China and discussed the deal. “What it means is we have one of the major producers in Alaska that has committed their gas to the project and that is a significant step in the right direction.”

The executive director of the Alaska AFL-CIO, Vince Beltrami, celebrated the announcement from the perspective of how many jobs a pipeline project is anticipated to create. “This is fantastic news because to us it means jobs.”

The union is committed to signing a project labor agreement with the AGDC to ensure that Alaskans are hired in the estimated 12,000 jobs that would be created during the peak of construction.

Beltrami also discussed the “historic” nature of the agreement saying for the first time in 40 years, a gas sales agreement had been signed with one of the state’s three big producers – BP Alaska, ConocoPhillips and ExxonMobil.

“We need to get ready to start training people because as far as I’m concerned, we’re on the path to building this project,” said Beltrami.

Bill Popp, the president and CEO of the Alaska Economic Development Corporation, was excited by the announcement but was cautiously optimistic about what it meant. “I think we need to be a little careful and not get out ahead of where things are at. Today’s announcement is incredibly important but we have several other incredibly important announcements we need to see before it is a reality.”

Popp said he believed oil and gas jobs losses had slowed down after dropping from 14,000 jobs across the state before the recession to around 9,500 today.

Kara Moriarty, the President and CEO of Alaska Oil and Gas Association, also welcomed the announcement as significant but described it as “a piece of a piece of a puzzle.” “One company doesn’t have access to enough gas to make the project work, so the state is going to need several gas sales agreements.”

For the AGDC, Meyer said this is a vital step, now the state has interested buyers in China in developing the $43 billion project and an interested seller in BP Alaska. “The two ends of that system together are what we really needed to focus on, now we’re going to focus on the financing aspect.”

Meyer says that Goldman Sachs and Bank of China have been engaged to deal with the debt and equity of the project.

If the project comes to fruition, Meyer said he expected the state would remain the majority stakeholder while minority stakeholders could involve Chinese companies and everyday Alaskans. “We’re required to provide a structure that allows regional corporations in Alaska to invest, municipalities and Alaskan citizens.”

Comments are posted from viewers like you and do not always reflect the views of this station. powered by Disqus