Great Bear Pantheon, a subsidiary of Pantheon Resources, has signed a gas sales precedent agreement (GSPA) with 8 Star Alaska, a subsidiary of AGDC.
This agreement outlines the commercial terms for a future binding contract for Pantheon to supply natural gas to the Alaska liquified natural gas (LNG) project.
The project, which is currently under development, aims to deliver gas within Alaska and export up to 20 million tonnes per annum of LNG.
AGDC's Alaska LNG project is a federally authorised initiative that aims to provide natural gas to Alaska’s regions facing an energy crisis.
It is considering a phased approach, starting with the development of a pipeline from the North Slope to south-central Alaska.
This initial phase does not include an LNG plant, significantly reducing capital expenditure and construction time, with gas transportation possible by 2029.
AGDC plans to commence front end engineering and design before a final investment decision around mid-2025.
The agreement between Pantheon and AGDC sets the stage for a 20-year supply of up to 500mcf/d from Pantheon's Kodiak and Ahpun fields at a base price capped at $1 per million British thermal units.
The terms also include minimum daily volumes for the take-or-pay obligation. The potential for a lower gas price exists if both parties collaborate to reduce project financing costs.
The initial term of the GSPA extends to 30 June 2025 or until the definitive gas sales agreement is executed, with provisions for automatic annual renewals.
This agreement could lead to additional funding opportunities for both the Alaska LNG project and Pantheon's field development activities.
AGDC president Frank Richards 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 south-central Alaska's looming energy shortage as soon as 2029.”
Pantheon executive chairman David Hobbs said: “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 south-central 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 six trillion ft³ of natural gas.”
