Parnell: Meeting with oil execs productive

In this photo provided by the Alaska Governor's office, from left, British Petroleum CEO Bob Dudley, ConocoPhillips CEO Jim Mulva, Alaska Gov. Sean Parnell and Exxon Mobil Corp. CEO Rex Tillerson are seen following a meeting Thursday, Jan. 5, 2012. Parnell had called for a meeting with the oil executives in an effort to try to reach agreement to advance a natural gas pipeline project. (AP Photo/Alaska Governor's Office)

JUNEAU — Alaska’s governor met for two hours Thursday with the chief executives of three major oil companies to discuss ways to advance a natural gas pipeline project in the state’s North Slope.


The meeting came three months after Gov. Sean Parnell invited Rex Tillerson, chief executive of Exxon Mobil, as well as BP CEO Bob Dudley and ConocoPhillips CEO Jim Mulva, to a “multi-party meeting of the gas commercialization stakeholders.”

Parnell said in October that he wants the companies to unite behind a project that would allow for liquefied natural gas to be shipped overseas. The governor would like them to do this under the framework of the Alaska Gasline Inducement Act, which gave TransCanada Corp. an exclusive state license to build the pipeline and up to $500 million in state incentives.

The Canadian company has been working with Exxon Mobil to advance the project but has yet to announce any agreements with potential shippers. While it has focused attention on a longer line that would deliver gas to North American markets by larger lines to Canada, it also has proposed a smaller line that would allow for liquefied natural gas exports.

A rival project, a joint effort of BP and ConocoPhillips that also would have gone through Canada, folded last year.

Dudley told reporters in Anchorage he thinks it would be possible for the companies to unite under terms of AGIA, even though it was some of the law’s provisions that led to the rival project. He said there would have to be adjustments to tailor it to a liquefied natural gas option, if that’s the route that’s ultimately chosen.

No firm commitments were made in Thursday’s meeting, but the companies are at least talking, and Parnell said Alaskans should take that as a positive sign.

The companies have insisted that their goal is to find ways to commercialize gas — a goal shared by the administration — and Dudley said the companies realize it’s time to begin thinking about what it will take for them to get behind a project.

That’s not to say it will happen; there are many factors to weigh, including the cost of the project and the potential markets.

“I’m not saying it’s impossible but I think the world economic conditions and the drivers of natural gas have changed,” Dudley said. “So I think what we’re talking about today is a way to further define how to take that resource to a market and it looks like the Pacific Rim has real potential.”

An Exxon Mobil spokesman, David Eglinton, said the parties are in “early discussions” and considering both the export option and the Canada route.

Alaskans have long hoped for a gas line as a way to shore up revenues as oil production declines, create jobs and provide more reliable energy.

Tillerson, Mulva and Dudley also attended a reception, which included current and former political leaders. It was closed to the public.


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