Alaska authorities sue oil giants

Oil firms ExxonMobil and BP are being sued by local authorities in Alaska who accuse them of holding back gas.

The authorities want to build a gas pipeline to rival one proposed by the firms, who they say have hampered their attempts at getting a deal.

BP and ExxonMobil want a pipeline to take gas from Alaska to mainland US, where prices are near record levels.

The authorities want a shorter pipe link to an Alaskan port, where the gas would be liquefied and loaded on ships.

The Alaska Gasoline Port Authority, which represents local governments from the North Slope, Fairbanks and Valdez, filed its lawsuit in US District Court in Fairbanks, Alaska.

Instead of a $20bn trans-Alaskan operation, it wants to build an 800-mile natural gas pipeline to Valdez, where it would be chilled, liquefied and loaded onto tankers for shipping to the continental US and Canada.

The lawsuit alleges that BP and Exxon have been holding back gas from the North Slope area, as well as engaging in illegal agreements, mergers and acquisitions, in order to scupper the plan.

Jim Whitaker, mayor of the Fairbanks North Star Borough, said that the legal action aims to “acquire gas in a free market environment, nothing more, at a fair market value”.

“That’s all we’ve ever asked,” he added.

Exxon and BP, along with oil giant ConocoPhillips, want to lay pipe the whole way from Alaska, through Canada and into the rest of the US.

A spokesman for ExxonMobil said “the notion that ExxonMobil and the other North Slope producers have a vested interest in not developing the gas resource is ridiculous”.

He said the gas producers had “determined that a pipeline to Alberta is the most economically viable method of bringing gas to market” and would “aggressively defend ourselves”.