International Tower Hill Mines (ITH)(TSE:ITH)(NYSE:THM) said Wednesday that the State of Alaska has reached a settlement with major oil companies for the study of a liquefied natural gas pipeline at the Point Thompson gas field.
The settlement was reached with BP (NYSE:BP), Exxon Mobil (NYSE:XOM) and ConocoPhillips (NYSE:COP).
gold exploration and mining company said that a major gas pipeline in
the state would have the potential to significantly reduce power costs
in Alaska and positively impact the economics for its 100
percent-controlled Livengood gold project located near Fairbanks, in the
Tolovana mining district within the Tintina Gold Belt.
settlement was officially announced on March 30, and ITH said the deal
ends three decades of dispute over Point Thomson, a large oil and gas
field located 60 miles east of Prudhoe Bay, located on the North Slope
of Alaska's northernmost coast.
"This settlement is a huge step in the right direction for the development of affordable energy in the state of Alaska for both
residents and businesses," ITH president and CEO James Komadina said.
Point Thomson gas field holds an estimated eight to nine trillion cubic
feet of gas, or approximately one fourth of the total 35 billion cubic
feet of gas in the North Slope, which contains approximately one-eighth
of U.S. total reserves.
ITH said almost 90 per cent of Alaska's
gas output, which is produced as part of oil production, is reinjected
into the field because there currently is no way to bring the gas to
and Conoco have yet to announce the next steps for the plan, which is
expected to include a large gas pipeline to Alaska's southern coast and a
plant to liquefy gas for export.
ITH said the proposal, which
could cost an estimated $40 to $50 billion and take five to 10 years to
develop, still has to clear many commercial and regulatory hurdles.
said: "This is also an extremely positive development for the Livengood
Gold Project as energy costs account for more than 25 percent of our
anticipated overall production costs. The construction of a new LNG
pipeline has the potential to reduce our energy costs by a significant
margin, making our project much more robust economically."
Livengood project is now in transition from an exploration project to
undertaking a pre-feasibility study. Field investigations at the
Livengood property are ongoing, with a total of nine drilling rigs
working at the site during the summer 2011 program.
In 2012, ITH
is focused on the rapid advancement of the Livengood project into a
compelling potential development scenario while it continues to expand
its current resource and explore its 145-square-kilomtre district for