BP signs cooperation agreement with state to advance gas project
Alaska’s plans for a liquefied natural gas pipeline got a bit of a boost Monday. Oil giant BP and the state have inked a new agreement that calls for BP to assist the state in finding financing for its gas project, known as AKLNG.
In August, BP, ConocoPhillips and ExxonMobil announced they were ending their partnership with Alaska on AKLNG, a mega-project with a price tag of $45 billion to $65 billion. All three companies said an Alaska gasline wasn’t competitive enough for them, at this time.
In an update to lawmakers Monday, the three companies echoed that message.
“The project today does not compete, that is not about oil price, it’s not about gas price, that’s about the cost — what it costs us to deliver a molecule of gas to Asia,” said Damian Bilboa, of BP Alaska LNG LLC.
Bilboa said BP has entered into a cooperation agreement to help the state find new ways to move the project forward alone through third-party financing. According to a press release Monday, BP will contribute staff, resources and the selection of third-party contractors.
“Just like the state, we’d like to sell that gas,” said Bilboa, adding that Alaska gas is BP’s largest undeveloped resource. “But it has to be competitive, it has to be commercial just like it needs to be those for the state.”
Bilboa said BP will also help the state refine its understanding of tolling structures that could be used to make the project more economic.
Rosetta Alcantra, a spokesperson for the Alaska Gasline Development Corporation, called the agreement from BP “monumental.”
“It really creates a lot of space for optimism and certainly when you have players and partners like that I think today things look a little bit brighter for us,” Alcantra said.
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