State approves ExxonMobil’s expansion plan for Point Thomson, ending months-long fight

Point Thomson is approximately 60 miles east of Prudhoe Bay. (Photo courtesy ExxonMobil)

Gov. Bill Walker’s administration has approved a plan to possibly expand a massive gas field east of Prudhoe Bay.

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The Point Thomson gas field currently produces a diesel-like fluid. But it’s sitting on a giant natural gas reserve that is a crucial part of the state-led gasline project.

In a press release, Walker said the Point Thomson field expansion adds momentum to the state’s Alaska LNG project.

But, it has been a struggle to get the field developed. The state’s fight with the field’s operator, ExxonMobil stretched out into a years-long legal battle that was settled in 2012. That settlement laid out a legal plan for developing the field.

After the field came online last year, Exxon released a plan that included upping natural gas production from the field and potentially arranging to pipe it to Prudhoe Bay if the state’s gasline project had not been approved by 2019.

The state rejected that plan in August, saying that the company was not doing enough to prove that it would actually expand the field.

After months of negotiation, the state released the new plan on December 22. It includes more details on what ExxonMobil will do over the next two years to expand the field. The company says it will negotiate a commercial agreement send gas to Prudhoe Bay, some 60 miles away. It will also engineer and design wells and other infrastructure that’s needed to expand the field.

The company released a statement saying that it wants to develop Point Thomson through a major gas sale. But, absent being able to sell it to the state-led LNG mega-project, the company is exploring the idea of selling it to Prudhoe Bay instead.

ExxonMobil operates the project. BP and ConocoPhillips also have ownership stakes in the field.