North Slope veteran Weiss joins gasline board of directors

  • Former BP Alaska President Janet Weiss speaks at the 2019 Alaska Resources Conference. Weiss, who retired from the oil industry after BP sold its Alaska assets to Hilcorp Energy last year, was tapped by Gov. Mike Dunleavy on Aug. 23 to join the Alaska Gasline Development Corp. board of directors. (Photo/Michael Dinneen/For the Journal)

Gov. Mike Dunleavy added a unique perspective to the state’s team trying to build the massive and long-sought Alaska LNG Project when he named Janet Weiss of Anchorage to the Alaska Gasline Development Corp. board of directors on Aug. 23.

That’s because Weiss spent seven years leading BP’s Alaska business — and working Alaska LNG from a different angle — before the global energy giant left Alaska when its $5.6 billion sale to Hilcorp Energy closed last year.

When BP left, Weiss retired from the industry, but stayed.

“No plans to leave, 28 years (in Alaska), so it’s definitely home,” she said in a recent interview with the Journal.

As president of BP Alaska, Weiss led the business through the first iteration of the $39 billion Alaska LNG Project: a producer-led consortium formed officially in 2014 that the state was a minority partner in and was championed first by former Gov. Sean Parnell.

She also observed, from the inside, the transition in 2016 under former Gov. Bill Walker to a state-led project. That shift was largely the result of depressed oil and gas markets that caused the producers to slow their development plans and spending for Alaska LNG as well as Walker’s long-held belief that the State of Alaska should take a more active role in spurring the project on.

Dunleavy said in a statement from his office that Weiss’ 35 years of experience in the oil and gas industries will be an “extremely valuable” addition to AGDC.

“Like so many others, when Janet arrived in Alaska in 1986 she fell in love with our great state and its rocks and reservoirs. Janet spent her career in almost every corner of the oil and gas industry and from 2013 to 2020 she led BP Alaska as its President, while continuing to be involved in the Alaska philanthropic community. Her remarkable experience and capable leadership will be indispensable as AGDC continues its work to unlock Alaska’s natural gas on the North Slope,” he said in a statement for the Journal.

Former AGDC board chair Dave Cruz, who was the longest serving member on the corporation’s board when he stepped away last year, said he believes Weiss will bring a perspective to AGDC that the state hasn’t had before and has more knowledge about what the producers need to continue progressing the project.

His interactions with Weiss came at big events related to the project, such as stakeholder meetings, during his roughly seven years on the AGDC board. Cruz added that he thinks Weiss’ years in Alaska before taking over the leadership position for BP can be valuable.

Weiss applied for the board after getting some encouragement from others involved in the project, she said.

“She wasn’t a transplant here at the executive management level, Cruz said. “She came up through the ranks here. She understood extremely well the dynamics of the North Slope because she came up as a management person who worked her way up here. And that’s the best way for people to understand it.”

A reservoir engineer by training, Weiss was BP’s vice president of resource development in Alaska before taking the lead role with the company in the state.

Under Weiss, BP agreed in 2019 along with ExxonMobil to each provide up to $10 million to AGDC for completing the exhaustive AK LNG environmental impact statement, or EIS, which the Federal Energy Regulatory Commission approved in May 2020.

She wrote in an email to follow-up questions that she advocated strongly for BP to help fund the EIS despite the fact that it was the state’s responsibility at that point because “that body of work was the culmination of a lot of funding and man-hours, and it best served all parties involved to complete it,” she wrote. “Keeping the opportunity moving forward.”

Now, AGDC leaders are hoping to turn the project back over to private hands under the Dunleavy administration. They have said they hope to secure commitments from developers, operators and investors in the LNG and gas treatment plants by this fall, with the project’s major financial agreements coming next year.

AGDC President Frank Richards has said agency officials are in confidential negotiations with a lead party to manage the gas pipeline portion of the project at least partially contingent upon the availability of federal funds for the first phase of construction.

Then-ExxonMobil CEO Rex Tillerson notably said in 2015 that Alaska is its “own worst enemy” because the plan for a major North Slope gas project changes every time a new governor is elected, which has been every four years since 2002.

Weiss said she believes the most important aspects of successfully developing a megaproject such as Alaska LNG are having sufficient expertise to lead the many facets of such a complex endeavor and, just as importantly, alignment amongst those expert parties on how to move forward.

“There’s not one answer to all of this. Different players have different parts to play and come in at different levels of project definition,” she said of advancing Alaska LNG.

“Do you have the right expertise for the various parts of the project because you can’t have a massive ‘whoops’; that’s what you can’t have. You don’t want this project to come in and cost double. Something that you think is going to be wonderful for the state turns into the biggest albatross; so you have to have the right experience and not have the ‘whoops.’”

Under Walker and former AGDC President Keith Meyer, the state pushed an aggressive development timeline for the project, hoping to have it operational by the mid-2020s in order to capitalize on what they and many others noted is a window to secure long-term contracts with some of the world’s largest LNG buyers in Asia.

That focus on timing was likely a point of misalignment between the state and company leaders, according to Weiss, because of how important it is to balance all of the complex — and sometimes competing — priorities of developing a project the scope of Alaska LNG.

“There is a window, an opportunity, so you can see that somehow you have to figure out that level of alignment so you can have your cake and eat it, too,” Weiss said.

She also went out of her way to emphasize that the many Alaskans, including Walker, who have been critical of state officials and leaders of the North Slope producers for not constructing a gas pipeline project in some form over the decades since the oil was first developed often overlook a very key factor: the gas was being put to work that whole time.

The natural gas produced along with oil at Prudhoe Bay has long been injected back into the field to boost reservoir pressure and ultimately enhance oil production.

In 2015, the Alaska Oil and Gas Conservation Commission approved increased gas “offtake” from the North Slope to supply the Alaska LNG project, with production expected to start in 2025 at the time. The decision was seen as a recognition by state regulators that the economic value of continuing to inject the gas for oil recovery would be bested by the value of commercializing the gas in the middle of this decade.

Prudhoe Bay was originally expected to produce about 9.5 billion barrels of oil but it has now given up more than 13 billion barrels of crude, Weiss noted.

“A gas project wouldn’t have worked all those years ago. That additional oil recovery was worth far more than a gas project would’ve been at the time so it’s a wonderful thing that we got that additional 3 billion barrels of recovery from what we did with the gas for all those years,” she said. ”So now is the time to see if we have a project and it works out with the field life in Prudhoe Bay.”

When the AOGCC issued its decision in 2015 approving gas offtake from Prudhoe, the capital cost for Alaska LNG Project was roughly pegged at $45 billion to $65 billion. It has since been cut through multiple rounds of engineering down to about $39 billion, according to AGDC leaders.

Weiss stressed that cutting the project’s overall cost of supply, which includes, but is not limited to, the immense capital expense, continues to be imperative even with the progress that’s been made. It’s something the producers each track very closely and have specific, if fluid, targets for.

That cost of supply target was in the range of $10 to $11 per million British thermal units, or mmbtus, a standard unit in the LNG industry, in 2013-14 when work started in earnest on the Alaska LNG Project, according to Weiss, and it has fallen significantly since.

“I remember when it fell to $8 and we really had to scramble and come up with…what are some additional levers, what can we do?” she recalled. “The bar is lower now and I’ve got to dive in there and understand — where are we?”

AGDC leaders have said they believe the cost of supply for delivered gas to Asian customers from Alaska LNG is now in the $7 range. Weiss said she has an idea of what the target should be based on current market conditions but she’s “going to reserve that one” for now.

To that end, there is still some confidential information Weiss has from her years with BP that she can’t use in her new role with the state gasline corporation, but much of it has an expiration date “when it’s not helpful” to BP, she said.

“What’s really helpful, from my perspective from BP, is just being a participant and understanding a lot more about how these projects work,” Weiss said. “There’s less of this sensitive information than you might think because of time.”

Elwood Brehmer can be reached at [email protected].

09/15/2021 - 10:10am