LEFBP (Exploration) Alaska President Janet Weiss, left, Gov. Bill Walker, center, and ConocoPhillips Alaska President Joe Marushack discuss the progress of the Alaska LNG Project at a press conference in Anchorage on Wednesday. The four partners committed to continue work on the project through the rest of the year, but are weighing options on how to proceed as depressed oil prices have hammered the bottom lines for North Slope producers and the state budget.

LEFBP (Exploration) Alaska President Janet Weiss, left, Gov. Bill Walker, center, and ConocoPhillips Alaska President Joe Marushack discuss the progress of the Alaska LNG Project at a press conference in Anchorage on Wednesday. The four partners committed to continue work on the project through the rest of the year, but are weighing options on how to proceed as depressed oil prices have hammered the bottom lines for North Slope producers and the state budget.

Gas project partners to consider options

JUNEAU — Gov. Bill Walker said Wednesday that the state and its partners on a proposed mega-liquefied natural gas project will look at different options for moving forward amid low oil prices.

More details are expected in early March, Walker’s office said.

In a letter last month to officials with project partners BP, ConocoPhillips and Exxon Mobil, Walker said he wanted agreements reached on eight areas before the end of the regular legislative session, which is scheduled to conclude in mid-April. The administration had been targeting a spring special session for lawmakers to consider contracts and a constitutional amendment to support long-term tax and royalty terms sought by the companies.

But the parties have said talks are difficult. Lawmakers also have heard from the companies about the challenges in the current price environment.

On Tuesday, state Revenue Commissioner Randall Hoffbeck said it doesn’t appear that contracts will be in place in time for lawmakers to be able to review them and get a constitutional amendment on the ballot this fall, though he said it’s possible something could break in the next few weeks that could allow that to happen. The next soonest a constitutional amendment could appear on the ballot is 2018.

Walker said that since he sent the letter, the parties are discussing how to move the project ahead amid low oil prices. That involves looking at ways to bring down costs significantly, keep up the momentum and make the project viable, he said. In going through the process, some of the issues detailed in the letter may not be as critical as they were in terms of timing, he said.

“At this point in time, with challenging oil prices, we want to see all of us coming together to look for ways to keep this thing on track,” said Janet Weiss, president of BP Alaska.

Alaska needs this project, and it’s an important project in BP’s portfolio, Weiss said.

During a news conference with company representatives Wednesday, Walker said the good news is that the parties are motivated to develop and make money off North Slope gas. The project is on track for concluding the current preliminary engineering and design phase this fall, he said. Then, the parties would have to decide whether they want to move to the next stage.

Attorney General Craig Richards told lawmakers last month that a project could be done without a constitutional amendment. But if the Legislature is going to surrender its authority to change taxes, a constitutional amendment would be needed, he said.

Walker said it’s possible something could be provided without a constitutional amendment.

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