Leaders of the state-owned Alaska Gasline Development Corporation were the subjects of a legislative inquiry on Tuesday as lawmakers consider whether the AGDC is fit to take over from pipeline giant TransCanada in the natural gas megaproject known as AKLNG.<\/p>\n
Tuesday was the fourth day of a special session devoted to deciding whether the state should buy out TransCanada\u2019s share of the $45 billion to $65 billion project in order to be assured of more profit once it begins operating.<\/p>\n
\u201cI think members of the Legislature would like assurances that whether it\u2019s Gov. (Bill) Walker or some other governor down the road \u2026 that AGDC is fully autonomous \u2026 from any administration that may be in power at the time,\u201d said Rep. Mark Neuman, R-Big Lake and chairman of the House Finance Committee.<\/p>\n
The official question on lawmakers\u2019 agenda in this special session is whether to allocate $157.6 million to pay for the state\u2019s share of the first phase of AKLNG, which would bring natural gas from the North Slope to Cook Inlet for export.<\/p>\n
To avoid paying up front for its one-quarter share in the project, the state entered into a contract with Canadian firm TransCanada. Under the terms of the agreement, TransCanada pays all of the state\u2019s direct costs until construction begins, then half of the state\u2019s share of construction costs. In return, the state gives TransCanada a cut of its revenue once gas starts flowing.<\/p>\n
If the pipeline deal falls apart for any reason, or if TransCanada wants to walk away from it, the state must repay TransCanada every dollar plus 7.1 percent interest.<\/p>\n
That\u2019s a high interest rate compared to the open market, which is why the state is considering a buyout and has earmarked $68 million of the legislative request to take an \u201cofframp\u201d built into the TransCanada contract. If the state doesn\u2019t act by Dec. 31, its next offramp is years (and hundreds of millions of dollars) later.<\/p>\n
Lawmakers seem to have been convinced of the financial benefits of such a decision, and they\u2019re now focusing on what would come after a buyout, when AGDC takes TransCanada\u2019s spot.<\/p>\n
Can the state borrow the $12 billion to $16 billion needed for its share of the pipeline? Can AGDC effectively manage the effort? And what happens if the worst happens and the deal falls apart?<\/p>\n
Early in Tuesday\u2019s House Finance Committee meeting, AGDC vice president Joe Dubler firmly killed any question about whether the AGDC has the legal ability to take TransCanada\u2019s role. Neuman had questioned that ability on Monday.<\/p>\n
Armed with a legal opinion from one of the state\u2019s assistant attorneys general, Dubler explained that Senate Bill 138 \u2014 which began the AKLNG project \u2014 allows AGDC to \u201cacquire an ownership or participation interest in an Alaska liquefied natural gas project\u201d among other things.<\/p>\n
\u201cAGDC has statutory authority to acquire TransCanada\u2019s interest in the AKLNG Project,\u201d wrote assistant attorney general Martin Shultz.<\/p>\n
The AGDC questioning will continue today in the Senate Finance Committee, which meets at 9 a.m.<\/p>\n
The most anticipated meeting of the day will come in the afternoon, however, as TransCanada major projects director Vincent Lee speaks to the House Finance Committee.<\/p>\n","protected":false},"excerpt":{"rendered":"
Leaders of the state-owned Alaska Gasline Development Corporation were the subjects of a legislative inquiry on Tuesday as lawmakers consider whether the AGDC is fit to take over from pipeline giant TransCanada in the natural gas megaproject known as AKLNG. Tuesday was the fourth day of a special session devoted to deciding whether the state […]<\/p>\n","protected":false},"author":426,"featured_media":22500,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[34,230],"yst_prominent_words":[],"class_list":["post-22499","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-alaska-legislature","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/22499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=22499"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/22499\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/22500"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=22499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=22499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=22499"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=22499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}