The state\u2019s partner in the AKLNG natural gas project says it\u2019s ready to be bought out.<\/p>\n
Vincent Lee, director of major projects development for Canadian firm TransCanada, told lawmakers Wednesday that if they don\u2019t approve a buyout of its position then TransCanada will consider leaving on its own.<\/p>\n
\u201cWe would definitely seriously consider that as an option,\u201d Lee said during a House Finance Committee meeting, though the final decision would be left to the pipeline corporation\u2019s board of directors.<\/p>\n
The revelation came as lawmakers debate whether to allocate $157.6 million to pay for the state\u2019s share of the first phase of AKLNG, a $45 billion to $65 billion project that 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 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
In a morning hearing, the Senate Finance Committee sharply criticized the administration of Gov. Bill Walker when it failed to make the Alaska Gasline Development Corporation president Dan Fauske available for comment.<\/p>\n
\u201cWe feel like we\u2019re being stonewalled,\u201d Sen. Peter Micciche, R-Soldotna, said.<\/p>\n
After the committee recessed for a short time, Fauske was made available by phone to answer questions that continued in an afternoon hearing.<\/p>\n
\u201cWe\u2019re not here to torture folks from AGDC. We\u2019re not. Really,\u201d Micciche said after another round of at-times intense questioning.<\/p>\n
In the House, things were calmer as Lee told lawmakers that yes, TransCanada has confidence in the AKLNG project, that it has confidence the state can proceed without it, and that AGDC is capable of taking over.<\/p>\n
\u201cWe\u2019re a strong believer of this project,\u201d Lee said. \u201cWe think this is a good project. We think this project has a lot of potential.\u201d<\/p>\n
Even if the state-owned AGDC didn\u2019t have the necessary expertise, Lee said the state\u2019s other three partners in the project \u2014 BP, ConocoPhillips and ExxonMobil \u2014 do have those skills. <\/p>\n
\u201cPersonally, I believe the three producers, with the depth of experience and knowledge of megaprojects would be able to carry out this project … without any difficulties,\u201d he said.<\/p>\n
Lee acknowledged that TransCanada\u2019s interest in leaving the project began after the Walker administration made it clear starting in May or June that it was interested in buying out the company.<\/p>\n
\u201cThe current administration has a different philosophy of how they see the role of the state of Alaska in the project,\u201d Lee said, which led TransCanada to start looking for the exit. \u201cI think we both decided this is probably the right thing to do.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The state\u2019s partner in the AKLNG natural gas project says it\u2019s ready to be bought out. Vincent Lee, director of major projects development for Canadian firm TransCanada, told lawmakers Wednesday that if they don\u2019t approve a buyout of its position then TransCanada will consider leaving on its own. \u201cWe would definitely seriously consider that as […]<\/p>\n","protected":false},"author":426,"featured_media":26991,"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-26990","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\/26990","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=26990"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/26990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/26991"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=26990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=26990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=26990"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=26990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}