Headlamp – Let’s Make a Deal – BP & AGDC sign Gas Sales Precedent Agreement.

HOT OFF THE PRESS: May 7, 2018 (ANCHORAGE) — The Alaska LNG Project reached a historic milestone today as BP Alaska and Alaska Gasline Development Corporation (AGDC) announced the parties have agreed to key terms of a Gas Sales Agreement, including price and volume. The terms are captured in a Gas Sales Precedent Agreement signed May 4, 2018. The parties anticipate finalizing a long-term gas sales agreement in 2018 for AGDC to purchase BP Alaska’s share of 30 trillion cubic feet (TCF) of gas from the Prudhoe Bay and Point Thomson units. BP operates the Prudhoe Bay field – the largest oil and gas field in North America and owns a 26 percent share of Prudhoe Bay as well as a 32 percent share of the nearby Point Thomson field.

Alaska governor to enter Democratic primary in election bid
AP News, May 6, 2018

Alaska’s governor and lieutenant governor are planning to run for re-election by entering the Democratic primary in August. Gov. Bill Walker and Lt. Gov. Byron Mallott had planned to bypass the primary and go directly to the November election by gathering signatures to run as unaffiliated candidates, the Fairbanks Daily News-Miner reported.

Our Take: “In a chronically leaking boat, energy devoted to changing vessels is more productive than energy devoted to patching leaks.” -Warren Buffett

Report says Alaska most profitable region for ConocoPhillips, by far
Anchorage Daily News, Alex DeMarban, May 6, 2018

An Alaska state senator on Friday said generous tax benefits for oil producers must end after a legislative report he requested found Alaska is by far the most profitable region in ConocoPhillips’ global portfolio.

Our Take: Incentives have led to investment and ConocoPhillips is doing well in Alaska. Why would Alaska do anything to change that dynamic? When they do well – Alaska benefits with tax revenue, jobs and a stronger economy.  

Key deal for LNG Canada
Upstream, May 6, 2018

Shell and its partners in the proposed LNG Canada project have moved a step closer to sanctioning the liquefied natural gas scheme in British Columbia after awarding a key contract to a consortium of Fluor and JGC, writes Eoin O’Cinniede. US contractor Fluor confirmed late last week that it and its Japanese partner were handed the engineering, procurement and construction deal for the proposed development at Kitimat.

Our Take: A final investment decision on a large LNG project by our Canadian neighbors is getting closer. Alaskans can learn from the process.

Stand vs. Salmon and Stand for Alaska dig in for long fight
Mat-Su Valley Frontiersman, Tim Bradner, May 5, 2018

The state supreme court has yet to rule on whether the contentious “Stand for Salmon” ballot proposition will make it to the voting booth this year, but groups on both sides of the issue are already in combat. “Stand for Alaska,” the campaign formed to oppose the initiative, already has social media carrying its message that the proposition will cause economic disruption. Stand for Salmon, which supports the proposition, says it has grassroots “people-to-people” efforts underway, and that Alaskans widely support new protections for salmon.

Our Take: We concur with the folks at Stand for Alaska when they say “Alaska is recognized as a world leader in responsible fish and habitat management. Alaska has numerous policies, acts and regulations that have been updated over the years and work together to protect fish habitat. Stand for Alaska believes the ballot measure is a misguided attempt to improve salmon habitat protections that will have serious unintended consequences for Alaska and Alaskans.” Check out their website at www.standforak.com

HB 331: How a “Good Deal” Quickly Becomes a Bad Deal for Alaskans
Thoughts on Alaska Oil & Gas, Brad Keithley, May 6, 2018

Last week on the eve of the House Finance Committee meeting and subsequent House floor debates on HB 331 — the bill authorizing the issuance of state bonds to pay for oil tax credits — a new analysis emerged asserting that the bonds might be a “good deal” for Alaska. Bonding for Tax Credit Purchases may be a Good Deal for Alaska (May 2018).

Our Take: If HB 331 can be used to encourage legislators and the Governor to control spending – we like it even more!