BP in Deal to Supply Alaska LNG Project
BP Alaska said May 7 it had entered into a long-term gas sales agreement with Alaska Gasline Development Corporation (AGDC) committing a portion of BP’s share of 30 trillion ft3 of gas from Prudhoe Bay and Point Thomson to AGDC’s proposed 20mn metric tons/yr Alaska LNG Project on the Kenai Peninsula.
BP owns a 26% interest in and operates the Prudhoe Bay field – the largest in North America – and a 32% share of the nearby Point Thomson field, on Alaska’s North Slope. Together, the two fields will produce about 3.5bn ft3/day of natural gas, with most of that – some 2.6bn ft3/day – coming from Prudhoe Bay
“The Alaska LNG project has made significant progress over the past year, and BP is pleased to sign this agreement,” BP Alaska president Janet Weiss said. “This is an important project for the future of the Alaska oil and gas industry.”
The gas sales precedent agreement – which captures key terms, including price and volume – comes just six months after US president Donald Trump and Chinese president Xi Jinping witnessed the signing in Beijing of a five-party point development agreement to advance the $43bn Alaska LNG project, which includes the terminal, a gas treatment plant on the North Slope and an 800-mile pipeline connecting the two.
“This gas sales agreement is a significant factor in progressing the Alaska LNG Project,” AGDC president Keith Meyer said. “We have secured the customers, we have progressed on the pipeline build with regulators and the finance community and now we have a commitment that there will be gas to sell and put through the pipeline.”
In November 2017, PetroVietnam Gas signed a memorandum of understanding with AGDC to collaborate on the supply of LNG to Vietnam, while in December 2017, Tokyo Gas signed a letter of intent on the sale and purchase of LNG from the Alaska LNG Project. No formal sale and purchase agreements have yet followed from either of those agreements.