INTERVIEW-Alaska gas pipeline needs tax deal by 2009-Conoco

By Robert Campbell

ANCHORAGE, Alaska, Feb 22 (Reuters) - Alaska and the companies that control the state's North Slope natural gas reserves must reach a tax stability accord by the end of 2009 if a gas pipeline is to be built on time, the top local ConocoPhillips gas executive said.

The Houston-based oil major announced plans in November to build a $30 billion gas pipeline by 2018, but the company says it needs to get binding commitments from gas shippers through an open season process in 2011 if it is going to proceed.

"At the moment we have a little bit of room to move forward with this subject, but well before the open season we need to find a way to sit down with the legislature and the administration," Brian Wenzel, Conoco's vice president for North Slope gas development, said in an interview on Friday.

"In our view that fiscal system ought to be agreed a year before the open season, so by the end of 2009," Wenzel added.

Conoco and the other North Slope producers, BP Plc (BP.L) and ExxonMobil Corp (XOM.N), have argued they will not be able to agree to ship gas on the pipeline unless they reach a deal with the state to freeze gas production taxes for a long time.

Alaskans are anxious for work on the line, expected to take a decade, to start as soon as possible since the state faces a looming fiscal crisis as oil production continues to fall.

Yet prospects for a quick tax deal look bleak as relations between the companies and state government are at their worst in years.

The state moved to hike oil taxes and pursue an independent pipeline over the majors' objections, amid an atmosphere of mistrust due to a bribery scandal in the state legislature.