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Gov. Sean Parnell talks oil, gas with BP CEO; plans to meet with Shell, ENI on European visit

Posted: November 3, 2011 - 12:10am

JUNEAU — Gov. Sean Parnell said Wednesday that he met for several hours with the chief executive of BP PLC during the first leg of his European trip, touching on issues ranging from a natural gas pipeline to how Alaskans might benefit if oil taxes are cut.

Parnell said he told Bob Dudley he wants to get Alaska’s gas to market as soon as possible. Last week Parnell told an oil and gas group that if the gas market has truly shifted from the Lower 48 to the Pacific Rim, he wanted the major North Slope players — Exxon Mobil Corp., ConocoPhillips and BP — to get behind a pipeline project that allows for liquefied natural gas exports to the Pacific Rim.

He told The Associated Press that he left the meeting believing the two held a similar view that the region’s market is worth investigating.

TransCanada Corp. is working with Exxon Mobil to advance a natural gas pipeline project but it has not announced any agreements with shippers necessary to move the effort along.

On Tuesday, the president and chief executive of TransCanada, Russell K. Girling, told a conference call the continued focus of the project remains the Lower 48. But he said this is a market-driven project, “and we’ll move the gas to wherever the market decides it wants to move the gas to.”

A BP spokesman in Alaska, Steve Rinehart, said the company has studied and will continue to study the potential for liquefied natural gas. He said the goal is getting North Slope gas to market.

Rinehart couldn’t comment on specifics related to Parnell’s meeting with Dudley but said “there clearly is much they could discuss and it is good they had that opportunity.”

Parnell is in the midst of his first state-sponsored trip overseas, what he’s calling an “investment mission.” It is the latest in a series of trips that Parnell or other members of his administration have taken in an effort to tout Alaska’s development and investment potential. Later this month Natural Resources Commissioner Dan Sullivan is expected to be in China, a leading export market for the state, where among other things he plans to talk up Alaska’s gas potential.

Parnell still plans to meet with the CEOs of two other energy firms, Royal Dutch Shell PLC, Europe’s largest oil company, and Eni SpA.

He began his trip in the United Kingdom, where in addition to meeting with Dudley he also promoted one of the state’s top exports, seafood.

Parnell said he was “professionally and graciously” received by Dudley, who Parnell said he also pressed to be more specific on what kind of benefits Alaskans could see if oil production taxes were cut. The president of BP Exploration Alaska, John Minge, said earlier this year that he supported the $5 billion investments that a ConocoPhillips executive envisioned if the tax regime were changed, and said he saw that as a start “in terms of what is possible.”

Minge’s comments came as Parnell’s tax cut bill stalled in the Senate, with leading lawmakers saying they didn’t have the information they needed to make a sound policy call and some seeking firm commitments from energy companies for what Alaska would see in return if taxes were cut.

“I think that number they put out there, the $5 billion number, of new investment or additional investment, I think that’s a bare minimum from one company,” Parnell said. While other companies would benefit from tax changes, too, “I’m in this to assure that Alaskans see more investment and see more jobs.”

Parnell plans to revive the tax issue when the Legislature convenes in January.

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