BP to press ahead with $20bn Alaskan pipeline

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The Independent Online

BP is readying one of the world's biggest-ever civil engineering projects, after winning an agreement that will allow it to build a gas pipeline from Alaska into the rest of the US.

The pipeline, which will cost upwards of $20bn (£11bn), will pump enough gas to supply 7 per cent of the US's daily gas consumption. BP and its two US partners, Exxon Mobil and ConocoPhillips, have won tax concessions that they say make the project financially viable.

Both Alaska and the energy companies involved have come under pressure from the White House to agree terms. Concerns over energy supply have mounted as natural gas prices have soared.

Alaska's Governor, Frank Murkowski, conceded a new profit tax of 20 per cent at a summit with executives from the three companies, including BP's head of exploration and production, Tony Hayward. He had previously been pushing for a 25 per cent tax rate.

The deal comes four months after the US put up $18bn in loan guarantees to support development of the pipeline. It will run from the vast state's North Slope, through Canada and into the Midwest, serving customers in Chicago and being distributed throughout the US.

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