The deal establishes terms for price and volume, and the firms are planning to finalize the long-term gas sales agreement in 2018.
Located in Nikiski, an industrial town located on Alaska’s Kenai Peninsula, south-west of Anchorage, the Alaska LNG Project is a proposed liquefied natural gas export project.
The project involves construction of an LNG plant, storage and shipping terminal, an 800-mile long pipeline from the North Slope to the LNG facility, and a gas treatment plant.
Upon signing the deals, AGDC will purchase BP Alaska’s share of 30 trillion cubic feet of gas from the Point Thomson and Prudhoe Bay units.
BP operates the Prudhoe Bay field, which is claimed to be the largest oil and gas field in North America, with 26% stake. Other partners include ConocoPhillips with 36% stake, ExxonMobil with 36% interest and Chevron with 1% stake.
Additionally, BP has stake in the Point Thomson field, which is operated by ExxonMobil.
Governor Bill Walker said: “This agreement means Alaskans are one step closer to finally monetizing the vast reserves of natural gas on the North Slope.
“The end result will be thousands of jobs, a significant reduction in energy costs to power homes and businesses, and cleaner air. Having BP – one of our longtime participants in this project – commit its share for the gas on the sale underscores the progress we continue to make to build a stronger Alaska.”
AGDC said that the development comes six months after US President Donald Trump and China President Xi Jinping signed a five-party joint development agreement to monetize Alaska’s natural gas.
AGDC president Keith Meyer said: “This Gas Sales Agreement is a significant factor in progressing the Alaska LNG Project.
“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.”
