By Dow Jones Business News,
January 15, 2014, 07:59:00 PM EDT
By Cassandra Sweet
Alaska officials want to invest billions of state dollars in a major natural gas transportation project that they
say will increase energy sales and boost state revenue.
The administration of Gov. Sean Parnell, a Republican, said Wednesday that it would seek lawmakers' approval of an
agreement with several big energy companies that would allow Alaska to become an equity partner in the export project,
which state officials have been pursuing for years.
Oil production has been declining in Alaska, prompting Mr. Parnell and his predecessors to seek ways to shore up
the state's finances, which have been heavily dependent on oil taxes and royalties. Officials have been eager to unlock
natural gas that is trapped underground near the Prudhoe Bay oil fields and in another gas-rich region called Point
"We have a compelling interest in seeing these resources monetized," Natural Resources Commissioner Joe Balash said
in an interview. By partnering with the companies, the state would shoulder a share of the costs while also enjoying a
share of the profits, he said.
BP PLC, Exxon Mobil Corp., ConocoPhillips and TransCanada Corp. have been working to develop the project, which
would include a pipeline that would ship natural gas from Alaska'sNorth Slope to the coast. A plant would convert the
gas into liquid form at low temperature so that it could be loaded onto ocean vessels and shipped overseas.
The liquefying plant could cost as much as $23 billion, while the pipeline and other related facilities and
equipment could cost roughly $22 billion more, according to estimates included in a November analysis commissioned by
The state plan entails buying as much as a quarter of the gas-export facility, which would require an investment of
as much as $5.7 billion. The state also would own a share of the pipeline, which TransCanada had previously agreed to
build and for which it has already received about $300 million in state funds.
After the Alaska legislature approves the plan, the companies and the state can then negotiate contracts that will
allow the project to proceed, BP said in a statement.
Write to Cassandra Sweet at firstname.lastname@example.org
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