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ANCHORAGE – The State of Alaska Monday reached an agreement with the Point Thomson working interest owners (“WIOs”) to advance progress of the Alaska LNG Project by aligning work commitments and timelines established in a 2012 settlement agreement.
The state settled a lawsuit with the WIOs in 2012 to establish specific timelines for production to begin at the field. Production began in 2016, and the settlement also required the WIOs to commit by the end of 2019 to increase production.
Through a Letter of Understanding signed today, the Department of Natural Resources, ExxonMobil, and BP agreed to terms to better align the settlement with the Alaska LNG Project. The agreement effectively stays the year-end 2019 deadline as long as the project continues to progress. The extension will end when the Alaska LNG Project reaches final investment decision, or when DNR notifies the parties that the project is no longer progressing. If the extension ends, the companies will have 30 months to reach final investment decision on either of two development options at Point Thomson, or else lose acreage.
“This agreement continues to demand that our resources at Point Thomson are developed to the maximum benefit of all Alaskans, and also aligns the state and industry in a new way as the Alaska LNG Project advances,” DNR Commissioner Andy Mack said. “We are committed to development of this critical resource, and this agreement keeps us on track.”
Development of Point Thomson oil and gas is important to the effort to bring North Slope gas to market, as it contains 25 percent of the North Slope’s discovered natural gas.