(SitNews) - After a breakthrough in Alaska LNG Project negotiations with ConocoPhillips and BP providing written assurances they will commit to a process to make available their share of Alaska’s North Slope gas to a future gas pipeline project, the Governor did not introduce a bill during this special session proposing a property tax on gas leases within the Prudhoe Bay and Point Thomson units. A gas commitment to an Alaska gas project will endure should either producer withdraw from the current AKLNG Project or the AKLNG Project fails to move ahead.

“It is important that Alaska act like the owner state it is,” Governor Walker said. “The reserves tax proposal is appropriate leverage for Alaska in response to a situation where known, producible gas could be withheld from a state project because it does not meet the commercial strategy of a particular producer. I am pleased BP and ConocoPhillips have now demonstrated their commitment to make their gas available for an Alaska project.”

In addition, the State, ConocoPhillips and BP have agreed to complete the project continuity and gas sale terms by early December.

“The continuity agreement will contain specific dates for the completion of the various commercial agreements that will enable this project to move forward,” Governor Walker said.

The commitment Governor Walker received from ConocoPhillips and BP means AKLNG will progress, but should either company decide to pull out of the project, the gas will still be made available for a project. Having the Prudhoe Bay and Point Thomson gas commitment will significantly enhance the ability to finance and build an Alaska liquefied natural gas project.

“I thank ConocoPhillips and BP for their commitment to address the state’s legitimate concerns regarding the assurance of a gas supply,” Governor Walker said. “I look forward to achieving the completion of the commercial agreements that will underpin the state’s fiscal commitments. Based on a call I received today from ExxonMobil, I am hopeful they will join ConocoPhillips and BP with a similar commitment.”

Both companies provided Governor Walker with written assurances they will commit to a process to make available their share of Alaska’s North Slope gas to a future gas pipeline project. Because of this commitment by ConocoPhillips and BP, Governor Walker said he will not introduce a bill during this special session proposing a property tax on gas leases within the Prudhoe Bay and Point Thomson units. A gas commitment to an Alaska gas project will endure should either producer withdraw from the current AKLNG Project or the AKLNG Project fails to move ahead.

“It is important that Alaska act like the owner state it is,” Governor Walker said. “The reserves tax proposal is appropriate leverage for Alaska in response to a situation where known, producible gas could be withheld from a state project because it does not meet the commercial strategy of a particular producer. I am pleased BP and ConocoPhillips have now demonstrated their commitment to make their gas available for an Alaska project.”

In addition, the State, ConocoPhillips and BP have agreed to complete the project continuity and gas sale terms by early December.

“The continuity agreement will contain specific dates for the completion of the various commercial agreements that will enable this project to move forward,” Governor Walker said.

The commitment Governor Walker received from ConocoPhillips and BP means AKLNG will progress, but should either company decide to pull out of the project, the gas will still be made available for a project. Having the Prudhoe Bay and Point Thomson gas commitment will significantly enhance the ability to finance and build an Alaska liquefied natural gas project.

“I thank ConocoPhillips and BP for their commitment to address the state’s legitimate concerns regarding the assurance of a gas supply,” Governor Walker said. “I look forward to achieving the completion of the commercial agreements that will underpin the state’s fiscal commitments. Based on a call I received today from ExxonMobil, I am hopeful they will join ConocoPhillips and BP with a similar commitment.”

Members of Alaska House Leadership said were relieved to see the governor withdraw Gas Reserves Tax legislation from the special session call on Saturday and praised the decision by the administration.

This is good news for the future of the gasline and the future of our state,” House Speaker Mike Chenault (R-Nikiski) said. “Instead of making hurdles for the producers to jump over we’re working with them to get the best deal for Alaska. I applaud the governor and his team for realizing the importance of working with the leaseholders of natural gas in Alaska to obtain project certainty. This is definitely a step in the right direction.”

Similar legislation overwhelmingly failed on a ballot initiative in 2006 by more than 70,000 votes.

“We came to Juneau for this special session to do one thing; to make sure we advance a natural gas pipeline,” House Majority Leader Charisse Millett (R-Anchorage) said. “By removing the gas reserves tax from the call we are creating more fiscal certainty and ultimately project certainty.”

“Taking it off the call is the right thing to do,” House Rules Chairman Craig Johnson (R-Anchorage) said on learning the governor had backed off earlier threats to introduce what Johnson described as ‘a punitive tax.’ “Threatening your partners is never a good idea. We need to pull together, not pull apart if we want to get the pipeline built.”

Edited by Mary Kauffman, SitNews

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