The state of Alaska, through Alaska Gasline Development Corporation, executed a memorandum of understanding with ConocoPhillips to market liquefied natural gas from the proposed Alaska LNG project.
Under the memorandum of understanding, the two companies will start negotiations to form a joint venture company that would facilitate the marketing of LNG from the Alaska liquefied natural gas project to global LNG markets and acquire North Slope gas, aiming to bring LNG buyers and North Slope wellhead sellers together.
According to the AGDC statement, together with ConocoPhillips it intends to seek the support of other North Slope producers in the formation of the JV.
The MoU is a step towards positioning the Alaska LNG project for a FEED decision.
The company further intends to structure the project for federal and tax state efficiencies, including seeking a federal ruling on tax-exempt status, advance low-cost financing and investor options, engaging engineering, procurement & contracting companies with the ability to shoulder a significant part of the construction risk.
It is also looking to enroll major North Slope producers to commit their gas to the planned JV or tolling arrangements with the project and to position a JV company to engage the LNG market to gauge the extent and timing of demand.
Active sales and negotiation activities with global buyers could begin once the JV has been successfully formed, the statement reads.
Once established, it is anticipated that the JV would focus initially on gathering LNG market information in support of the JV’s pursuit of gas and LNG sales agreements as the project moves forward.
The JV also intends to secure sufficient and reliable supply of gas to the project, resolving longstanding project gas supply assurance issues.