State gas line agency hires 5 new contractors for Texas office

The state gas line agency has hired five new contractors with experience in liquefied natural gas projects as part of a team based in Houston, Texas, adding roughly $1 million a year to the state project.

The Alaska Gasline Development Corp. is also taking over the fourth-floor office space of the Remington Square building that had been occupied by Exxon Mobil, adding another $160,000 a year for rent and utilities over a year's time, said Fritz Krusen, AGDC's vice president for the Alaska LNG project.

The revelations were part of an afternoon of testimony in AGDC updates to the Alaska House and Senate Resources committees. Also announced: The gas line agency has signed a cooperation agreement with BP to provide help in key areas of the project, officials said.

And Krusen discussed the benefits of the state-led project acquiring ConocoPhillips' small Kenai LNG plant, which for decades has liquefied natural gas from Cook Inlet and shipped it overseas for sale in Asia, though Krusen wouldn't say if the state is interested in buying the facility.

The announcement of the Houston contractors on Monday came days after the Alaska Gasline Development Corp. opened an office and hired a contractor in Japan to help find gas buyers in Asia to support the pipeline and liquefied natural gas project.

The agency in December took over the Alaska LNG project after the withdrawal of its big oil industry partners — Exxon Mobil, ConocoPhillips and BP — late last year.

The contracts for the Houston employees were not available Monday but would be later, said Rosetta Alcantra, vice president of communication for the agency. Alcantra and other AGDC officials were in Juneau Monday, one of three updates annually required by the Legislature.

The proposed Houston office is expected to facilitate conversations and negotiations with executives in the nation's energy capital as the state looks to find investors or companies with Asian operations interested in buying natural gas from the North Slope.

The new contractors bring experience in LNG project development in areas such as "commercial negotiations" for gas-supply contracts, according to a slideshow presentation for lawmakers.

* John Godbold has more than 20 years' industry experience with El Paso Energy, Enron and a variety of LNG development companies.

* Ian Salmon is a Chinese speaker who has more than 20 years' industry experience and work on multiple LNG projects, including in Qatar, the world's top exporter of liquefied natural gas.

* John Hattenberger has worked for four decades in the LNG and gas business, including for Russian-owned Gazprom, BP and the Oman government.

* Terry Mitchell has worked for Amoco and other companies and has more than 35 years experience in the energy industry.

* Chip Schuppert has worked more than three decades with ConocoPhillips, including specializing in LNG project development.

Alcantra said the contractors will be paid on an hourly basis. She said the office in Houston is close to opening. Mitchell will be the only full-time contractor.

Krusen told lawmakers that his project cost for the five Houston contractors of $1 million a year was an early estimate and that the final sum could change.

Damian Bilbao, vice president of commercial ventures for BP in Alaska, told the committees that BP on Sunday had signed a cooperation agreement with the gas line agency in part to help the state in key areas, including pursuing financing options to advance the project.

The company will commit employees and funding to the effort, he said, though the manpower will be a "fraction" of the number of people who worked on the project previously as early engineering studies were conducted. That effort in recent years involved about 120 employees plus contractors.

Bilbao said the agreement could help answer questions to determine if the state can lower costs to make the project competitive.

The agency earlier this month unveiled the opening of its office in Japan, a country that is expected to lead demand for LNG in the coming years, followed by China.

[State gasline agency opens Tokyo office, replaces state's representative in Japan]