Alaska, ConocoPhilips, agree on gas pipeline project

STATE OFFICIALS agreed in mid-October to key terms of a contract with one of three oil companies negotiating to build the 3360-km natural gas pipeline from Alaska through Canada and into the Midwest. ConocoPhillips agreed to provide the state with a fair share of the revenues, access to the gas, and job preferences for Alaskans on the pipeline, among other demands, said Governor Frank Murkowski. “We’re now one step closer to making an Alaska natural gas pipeline a reality,” said Jim Bowles, president of ConocoPhillips Alaska Inc. “The journey has just started.”

The terms of the agreement with ConocoPhillips won’t be released because negotiations are continuing with BP and ExxonMobil, Mr Murkowski said. The pipeline would be the largest construction project ever undertaken in North America, he continued. ConocoPhillips, Exxon Mobil, and BP applied as a group early last year to negotiate fiscal arrangements to build the $24-billion pipeline. The state would contribute $4 billion and the Legislature would have final say on the contract. After a contract is secured with the state, a regulatory process in Canada still must be defined and technology to reduce capital costs must be identified, the producers say.

The pipeline envisioned by producers will take a decade to build, and would initially ship 4.5 billion cuft/d of gas.

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