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 Thomson.
"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's North 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 state.
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 cassandra.sweet@wsj.com
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