The state-run developer of a massive liquefied natural gas export terminal in Alaska said it expects to finalize a deal with an Exxon Mobil Corp. unit that will help supply the proposed project with the supermajor's share of 30 trillion cubic feet of North Slope gas.
"This agreement means Alaska is one step closer to monetizing the North Slope's vast and proven natural gas resources," Alaska Gov. Bill Walker said in a statement.
Alaska Gasline Development Corporation, or AGDC, said it had reached "an important milestone" for the Alaska LNG project by signing a binding gas sales precedent agreement with ExxonMobil Alaska Production Inc. on Sept. 10.
An AGDC news release stated the agreement covers "certain key terms including price and a volume basis a gas sales agreement." The gas would come from Prudhoe Bay and Point Thomson production units, where ExxonMobil has a more than 36% share and a nearly 63% share in the fields, respectively.
"This precedent agreement is good for Alaska and ExxonMobil and represents a significant milestone to help advance the state-led gasline project," said ExxonMobil Alaska Production President Darlene Gates in a statement. "As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska's gas to market."
AGDC President Keith Meyer touted the development as a sign of "meaningful progress over the past year." AGDC would like to begin operations on the estimated $43 billion Alaska LNG project by the end of 2024. AGDC continues to hunt for potential collaborators to develop the pipeline and export terminal project. The proposed terminal is designed to have three liquefaction trains capable of producing 20 million tonnes per annum of LNG.
"We have secured the customers, we have advanced the project with regulators, and now we have ExxonMobil's gas sales precedent agreement executed," Meyer said in a statement.
The proposed Alaska LNG terminal was one of 12 LNG projects to get new and updated environmental schedules from the Federal Energy Regulatory Commission on Aug. 31 as part of the federal regulator's effort to speed up its reviews of applications. FERC set a self-imposed deadline of Nov. 8, 2019, to notify the public of a final environmental impact statement for the project, a major step toward a final decision from the commission.
In November 2017, AGDC signed a nonbinding joint development agreement with the Bank of China, China Investment Corp. and China Petrochemical Development Corp. for the project.