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Point Thomson Resolved, Aligment on Gasline

Press Release

Location: Anchorage, AK

Governor Sean Parnell announced today that two major milestones have been met in the state's effort to bring Alaska's natural gas to Alaskans and markets beyond.

First, the State of Alaska resolved its long-running litigation with ExxonMobil and other leaseholders regarding the Point Thomson field, which holds a quarter of the North Slope's known natural gas.

And, second, the three major producers -- ExxonMobil, ConocoPhillips and BP -- delivered a letter today to the governor announcing that they are now aligned with the Alaska Pipeline Project (APP) parties, and working on a gasline project focusing on bringing North Slope gas to tidewater in Alaska.

"Last fall, I told TC Alaska and the producers I wanted to see them pursue a large-diameter line in state to tidewater," Governor Parnell said. "And, in my State of the State speech in January, I gave a roadmap for commercializing Alaska's North Slope gas that included a number of critical benchmarks. I said the companies needed to finalize a Point Thomson settlement and align with the APP parties on an Alaska gasline project by the first quarter of this year.

"I am pleased to announce that the parties have resolved Point Thomson litigation and the three CEOs have stated their companies are now formally aligned with the APP parties. They have undertaken work together on the commercialization of North Slope gas with a specific focus on a large-scale LNG project from Southcentral Alaska."

Point Thomson, located 60 miles east of Prudhoe Bay, is Alaska's largest undeveloped oil and gas field, holding an estimated 8 trillion cubic feet of natural gas and hundreds of millions of barrels of oil and gas liquids. ExxonMobil is the unit operator at Point Thomson, with BP, ConocoPhillips and Chevron holding the majority of the leases. The state's legal dispute with the companies resulted from the lack of development at Point Thomson for the past 30 years.

"Today's settlement lays out strong near-term production commitments and a clear path for full development of Point Thomson's significant oil and gas resources, and it establishes clear consequences if the companies do not follow through," said Natural Resources Commissioner Dan Sullivan.

"The companies have agreed to firm timetables for production at Point Thomson. This will result in significant new investment, increased work for Alaskans and increased revenue for state and local government," Sullivan added.

"The animating principle of this settlement is that the companies must earn their acreage. The more work, more commitment, more investment and more production that occur, the more acreage the companies will retain," Sullivan said.

Major components of the settlement include:

Increasing liquids production into the Trans Alaska Pipeline System (TAPS).
Opening the Eastern North Slope to new development opportunities by adding infrastructure and a 70,000 barrels per day common carrier pipeline connecting to TAPS.

Incentivizing and laying out a clear path and alternatives for full-field development, each of which will require billions of dollars in investment if pursued.

Positioning North Slope gas for a large-scale gas pipeline project.
Providing potential for significant gas volumes for in-state use no later than 2019.

Requiring a commitment to develop a separate oil reservoir within Point Thomson.

To read the settlement and related materials, please go to:

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