AIM-listed Pantheon Resources, owner of a 100% working interest in the Kodiak and Ahpun oil and gas fields, and the Alaska Gasline Development Corporation ('AGDC'), a state-owned entity leading the development of the Alaska LNG Project, have announced that Pantheon's wholly owned subsidiary, Great Bear Pantheon LLC, has entered into a Gas Sales Precedent Agreement ('GSPA') with AGDC subsidiary 8 Star Alaska LLC.
Alaska LNG is a federally authorised integrated natural gas and LNG export project under development, to deliver natural gas within Alaska and export up to 20 million tonnes per annum ('mmtpa') of Liquified Natural Gas ('LNG'). AGDC is pursuing an option to phase Alaska LNG by prioritising the in-state pipeline portion of Alaska LNG consisting of the 42-inch pipeline from the North Slope to Southcentral Alaska to provide natural gas to avert the looming energy crisis facing the region ('Phase 1'). Phase 1 of Alaska LNG does not involve construction of an LNG plant, and as a result has a materially lower capex requirement and construction timeframe, allowing gas transportation as early as 2029. AGDC is aiming to undertake Front End Engineering and Design ahead of a Final Investment Decision ('FID') planned for the middle of 2025.
Frank Richards, AGDC President, commented: 'This agreement solidifies the commercial foundation needed for the Phase 1 portion of Alaska LNG and provides enough pipeline-ready natural gas, at beneficial consumer rates, to resolve Southcentral Alaska's looming energy shortage as soon as 2029.
'Phasing Alaska LNG by leading with the construction of the pipeline will make Alaska LNG's export components more attractive to LNG developers and investors, and this agreement will help unlock the project's substantial economic, environmental, and energy security benefits for international markets as well as for Alaska. Today's announcement represents the culmination of the committed work of Pantheon and AGDC leaders and enhances the prospects of Alaska LNG in a way that benefits both the State of Alaska and Pantheon.'
David Hobbs, Pantheon Executive Chairman, commented: 'We are delighted to have the opportunity to create a win-win for the State of Alaska and for Pantheon as we turn the fantastic exploration & appraisal success of the past five years into the development of two giant oil and gas fields on Alaska's North Slope. We are building a mutually beneficial long-term relationship with Alaska LNG and with the State which seeks to supply much needed gas required for Southcentral Alaska's energy needs, while at the same time realising the value from our total aggregate contingent resources exceeding 1.5 billion barrels of ANS blend and 6 Tcf of natural gas.'
'When we set out our strategy to achieve early production and cashflow on the path to financial self-sufficiency, we considered gas monetisation as a path to non-dilutive funding only one of several possibilities. However, the availability of our pipeline quality associated gas created the opportunity to bolster the Alaska LNG project, including the pipeline, LNG export facilities and gas conditioning facilities. We are happy to be able to share the benefit, thereby enhancing both Pantheon's and AGDC's project economics and funding profiles. Our goal of demonstrating sustainable market recognition of $5-$10 per barrel of 1C/1P marketable liquids by end 2028 remains unchanged.'
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Source: Pantheon Resources
