Alaska cuts deal with oil companies

The state of Alaska has reached an agreement with ExxonMobil, BP and ConocoPhillips to facilitate the creation of a gas pipeline to help the commercial exploitation of the region's enormous natural gas reserves, The Wall Street Journal has reported.

The Alaskan government has been locked in a dispute for years with the energy companies, who had licences to exploit the Prudhoe Bay area in the northern part of the state.

Those firms had been threatened with having their licences withdrawn, however, because they had not begun production activity there.

The accord maintains the validity of the licences provided the companies begin full gas production no later than 2016. It also forecasts that in that year they will be able to extract five million cubic metres a day.

Alaska Governor Sean Parnell recently presented a tax reform plan aimed at spurring investment in the distant North Slope region, where Prudhoe Bay is located.

The project includes the construction of a gas pipeline that will take the product from Prudhoe Bay and other natural gas fields in the region to a loading port in southern Alaska, where it will be converted into liquified gas for ease of commercial transport.

Alaska's huge natural gas reserves are calculated to amount to one trillion cubic metres just in the northern part of the state have not been exploited commercially yet and in many cases the gas is used only to facilitate the extraction of crude.

The state government, however, wants to foster the commercial exploitation and use of natural gas for domestic consumption and export, especially to Asia, where demand has been rising in recent years.

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