A proposed liquefied natural gas (LNG) project in Alaska may cost as much as $65 billion, according to a consortium of energy companies. This staggering figure provides investors with yet another reminder about the rising cost of global oil and gas development.

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Alaska LNG
The North Slope of Alaska contains trillions of cubic feet of stranded natural gas and various proposals have been offered to get these resources to market, including the construction of a LNG export facility. The estimated cost would range between $45 billion and $65 billion. This includes the construction of an 800-mile pipeline and other infrastructure needed to process and bring natural gas to the southern coast of Alaska.

The estimate was prepared by Exxon Mobil (NYSE:XOM), Conoco Phillips (NYSE:COP), BP (NYSE:BP) and TransCanada Corp. (NYSE:TRP) at the request of Sean Parnell, the governor of Alaska.

SEE: Commodities: Natural Gas

Acquisitions/Joint Venture
Penn Virginia
(NYSE:PVA) increased its leasehold position in the onshore United States, adding about 4,100 net acres prospective for Eagle Ford Shale in Texas. The acquisition cost the company $10 million and will boost its total position here to 30,000 net acres.

Shale and unconventional resource plays in the U.S. are expensive to develop and the industry is constantly looking for partners to share the cost of this development. Carrizo Oil & Gas (Nasdaq:CRZO) announced a joint venture agreement with OIL India Ltd. and Indian Oil Corporation Ltd. on its Niobrara position. The company will sell a 30% share for $82.5 million, with 50% in cash and the balance as a drilling carry to cover future development costs. Carrizo Oil & Gas will add a second operated rig here in 2013 and expects the drilling carry to be utilized by early 2014.

SEE: How Shale Fracking May Hurt Your Investment

Exploration
Marathon Oil
(NYSE:MRO) is involved with oil and gas exploration in frontier areas and has acquired a 20% interest in the South Omo concession in Ethiopia. The concession area is 7.2 million gross acres and is operated by Tullow Oil. The company plans an exploration well here in the fourth quarter of 2012.

The industry also sees exploration potential in Uruguay, with Total (NYSE:TOT), BP and two other operators awarded interests in eight offshore blocks. The companies agreed to invest $1.65 billion over the next three years, with first drilling expected in mid-2013.

SEE: Unearth Profits In Oil Exploration and Production

Bye Bye
Conoco Phillips is not as optimistic about exploration prospects in Peru. The company has ended its exploration efforts on two blocks in the Maranon Basin. The company has a 45% interest in these blocks and finished two seismic surveys of the properties. Conoco Phillips said that the decision was part of its strategic plan to rationalize its asset portfolio.

Conoco Phillips is also looking to sell the company's share of the Kashagan oil field in Kazakhstan. The large project has been under development for years and production is expected to begin in early 2013. The company has an 8.4% interest in the North Caspian Operating Company (NCOC), which is responsible for the project.

The Bottom Line
Many observers have noted the increased cost of oil and gas exploration and development as the industry works on a resource base that is less accessible than in previous generations. This was driven home last week with the shocking $65 billion cost of a proposed project in Alaska that will liquefy natural gas for export to Asia.

At the time of writing, Eric Fox did not own any shares in the companies mentioned.

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