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Alaskan gas has finally found a market after an agreement has been signed by several major oil and gas companies and the state to build an 800 mile pipeline from the gas fields on the North Slope to a planned LNG export plant in the West that would ship the product out to Asia.
Asian demand for LNG has soared in recent years after the Fukushima nuclear meltdown forced Japan to close down its entire nuclear sector and other countries to become more wary. Both Japan and South Korea are spending billions on LNG from North America and energy companies have laid out plans to build 30 new LNG export terminals across the continent.
The project, which will take around ten years to complete, will cost an estimated $45 billion to $65 billion, and will be one of the largest projects of its kind in the world, finally providing a route to get the regions gas to market after decades of being stranded.
Sean Parnell, the Governor of the State of Alaska released a statement on Wednesday to announce that the deal had been signed by Trans Canada Corp and the three major companies working the Alaskan North Slope, Exxon Mobil Corp, BP Plc, and ConocoPhillips.
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“This commercial agreement...is Alaska's roadmap to developing our vast gas reserves. This is truly a historic achievement.”
The proposed project will supply both the domestic demand for natural gas, as well as exporting LNG to Asia. The agreement was signed by the commissioners of Natural Resources and Revenue, and Alaska Gasline Development Corp (AGDC) to ensure that the state’s interests are being protected and well served by the project.
Reuters reports that the agreement signed lays out the fiscal terms, as well as promising third party access to all parts of the project; it even includes plans to develop an LNG train in the future.
Parnell claims that the AGDC will still continue with its own plans to develop the Alaska Stand Alone Pipeline project.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com