Parnell on LNG, Point Thomson

In a Jan. 11 interview with Petroleum News, Alaska Gov. Sean Parnell panned the rumor that his private meeting with the three CEOs of BP, ConocoPhillips and ExxonMobil on Jan. 5 had advanced the Point Thomson lawsuit settlement between the state and those three companies and Chevron. The rumor was started by someone present at the briefing that followed the closed-door meeting of the top executives.

“Certainly Point Thomson was part of that meeting … and the briefing that followed,” Parnell said. But it was “very clear at the end” of the meeting that the “litigation was not resolved.”

“Exxon as operator still has a ways to go with its partners,” the governor said.

A draft settlement crafted by the state and Point Thomson operator ExxonMobil about a year ago has been criticized in court documents by ExxonMobil’s partners in the dissolved unit. The largest Point Thomson leaseholders are ExxonMobil, BP and Chevron.

In regard to the visit to Alaska on Jan. 5 by the CEOs of Alaska’s largest gas owners, BP’s Bob Dudley, ConocoPhillips’ Jim Mulva and ExxonMobil’s Rex Tillerson, Parnell said he was pleased by the receptivity of the companies to take a serious look at LNG and their apparent willingness to work on aligning their interests.

The “general agreement” between all the parties was that the “market has shifted in the last four years,” favoring the liquefied natural gas market in Asia versus selling gas to U.S. markets, he said. “The economics have changed,” although the three companies “don’t (yet) know what that means” for an Alaska gas line project in the long-term.

“I like to see them working together … considering … an LNG line from the North Slope to tidewater.”

There are two things he wants to see from the companies, Parnell said:

1. Benchmarks for real progress, and;

2. Alignment.

—Kay Cashman