ExxonMobil Alaska Production Inc. and Alaska Gasline Development Corp. (AGDC) agreed to certain key terms including price and a volume basis in a gas sales precedent agreement signed by officials on Sept. 10 in Anchorage. The agreement represented an important milestone for the Alaska LNG project, the parties noted.
ExxonMobil and AGDC said they expect to finalize long-term gas sales agreements to purchase the supermajor’s share of 30 tcf of gas from the Prudhoe Bay and Point Thomson units. ExxonMobil Alaska operates Point Thomson field where the company has a 62.75% stake. It also owns 36.4% of nearby Prudhoe Bay field, North America’s largest oil and gas field.
“This precedent agreement is good for Alaska and ExxonMobil and represents a significant milestone to help advance the state-led gas line project,” ExxonMobil Alaska Pres. Darlene Gates said. “As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska’s gas to market.”
The agreement was signed less than a year after US President Donald Trump and China President Xi Jinping witnessed the signing in Beijing of a five-party joint development agreement to monetize Alaska’s natural gas (OGJ Online, Nov. 10, 2017).
“The Alaska LNG project has made meaningful progress over the past year,” AGDC Pres. Keith Meyer said. “We have secured the customers, we have advanced the project with regulators, and now we have ExxonMobil’s gas sales precedent agreement executed.”
Alaska Gov. Bill Walker (I) thanked ExxonMobil for its support of the project. “This agreement means Alaska is one step closer to monetizing the North Slope’s vast and proven natural gas resources,” he said.
The state’s all-Republican congressional delegation—US Sens. Lisa Murkowski and Dan Sullivan, and Rep. Don Young—welcomed news of the agreement. “While we recognize that much work remains to be done, we’re pleased to see the state using its authority and leverage under the Point Thomson settlement of 2012 to help move forward on this major infrastructure project,” they said.