Alaska will pay $4.5 billion for an equity stake in a $45 billion natural gas export project with partners Exxon Mobil Corp. (XOM), BP Plc (BP/), ConocoPhillips and TransCanada Corp. (TRP).
Alaska could take up to 25 percent in a proposed gas processing plant, an 800-mile (1,287-kilometer) pipeline from Alaska’s North Slope, and a liquefaction facility in the Kenai Peninsula, Bloomberg said.
Governor Sean Parnell has given the green light for state agencies to negotiate shipping and leasing arrangements. The state is trying to promote develop of gas, which has been overlooked in the state, in favor of crude oil.
“This is the first time we’ve had all of the parties aligned on a path forward,” Joe Balash, the department’s commissioner, said in a phone interview today before the announcement. The deal gives the project a “good shot” at proceeding, he told Bloomberg.
Alaska’s North Slope holds more than 35 trillion cubic feet of discovered gas, almost four times the U.K.’s reserves.
The project has an estimated budget of $45 billion but could cost “as much as $54 billion, according to a November 2013 Black and Veatch Ltd. study produced for the state. The producers estimated in a February 2013 letter to Parnell that the cost could reach $65 billion,” Bloomberg said.