ExxonMobil signs LNG supply agreement with Alaska Gasline Development

ExxonMobil Alaska Production has agreed on key terms for the supply of natural gas to Alaska Gasline Development (AGDC), which is developing the $43bn LNG project in Alaska, US.

The terms agreed by the parties include the price and a volume basis under a gas sales precedent agreement.

ExxonMobil will supply the gas from the Prudhoe Bay and Point Thomson fields in Alaska’s North Slope.

The parties intend to soon finalise long-term gas sales agreements to buy ExxonMobil’s share of 30 trillion cubic feet (TCF) of gas from the two fields.

ExxonMobil is the operator of the Point Thomson field with a 62.75% share, while its interest in the Prudhoe Bay field stands at 36.4%.

ExxonMobil Alaska president Darlene Gates said: “This precedent agreement is good for Alaska and ExxonMobil and represents a significant milestone to help advance the state-led gasline project.

“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.”

Last year, agreements were signed in the presence of US President Donald Trump and his Chinese counterpart Xi Jinping to monetise Alaska’s natural gas.

AGDC president Keith Meyer said: “The Alaska LNG project has made meaningful progress over the past year.

“We have secured the customers, we have advanced the project with regulators, and now we have ExxonMobil’s Gas Sales Precedent Agreement executed.”

In May, AGDC signed a gas sales precedent agreement to purchase BP Alaska’s share of 30TCF of gas from the Prudhoe Bay and Point Thomson fields.

The Alaska LNG project is expected to deliver 3.5 billion cubic feet of gas a day from the North Slope gas fields, mostly for export to global markets.

The project infrastructure will include a gas treatment plant, an 800-mile, 42in-diameter gas pipeline from the North Slope to a planned liquefaction plant in Nikiski on the Kenai Peninsula, south of Anchorage.

Construction of the project is anticipated to be completed by 2025.