HOUSTON - Exxon Mobil Corp., ConocoPhillips and BP PLC have agreed to start producing natural gas at their Pt. Thomson development in Alaska by May 2016 at the latest, according to a settlement agreement between the companies and the state of Alaska.
According to the document, the oil companies will be allowed to continue developing Pt. Thomson in exchange for the commitment to begin producing natural gas and condensate by end of the winter season of 2015-2016. The initial production system, which could be later ramped up, is being designed to produce about 200 million cubic feet per day of gas and 10,000 barrels per day of condensate.
Also, a pipeline is being designed to move about 70,000 barrels a day of liquid hydrocarbons from Point Thomson that will help move the fossil fuels to the Trans-Alaska pipeline.
The companies also agreed to "undertake work for commercialization of North Slope gas," the document said. The Alaska government has said it would like to see a liquefied natural gas development to ship local natural gas to Asia.
If a deal to sell the natural gas hasn't been struck by June 2016, the companies agreed to expand the amount of natural gas condensate shipped to the Trans-Alaska pipeline by 20,000 to 30,000 barrels a day. Point Thomson gas could also be delivered to oil operations in Prudhoe Bay for injection into the large oilfield there, the document said.
The agreement said that a "major gas sale off the North Slope of Alaska is a primary goal of the parties."
The settlement puts to rest a long-standing dispute between the oil companies and the Alaska government. In 2006, the state revoked the Point Thomson license it had assigned Exxon and its partners alleging they hadn't moved quickly enough to develop the resource.
Copyright (c) 2012 Dow Jones & Company, Inc.
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