Increased state control of the Alaska Liquefied Natural Gasline project was a concept first proposed by the state\u2019s producer partners to lower the cost of the $45-$65 billion project, Gov. Bill Walker said Monday.<\/p>\n
Walker spoke about the prospect of a state-led AK LNG project to members of the Anchorage Chamber of Commerce at its weekly meeting.<\/p>\n
Walker said he felt it was important he correct the record regarding \u201cmisinformation\u201d that has been circulating about what his administration and the producers are doing to continue the project.<\/p>\n
The producers first floated the idea of growing the state\u2019s 25 percent ownership stake in the project in the April or May, according to Walker. It would allow the project to capture the benefits of the state\u2019s federal tax-exempt status and reduce its immense cost, particularly at a time when world LNG markets are more competitive than ever, he said.<\/p>\n
\u201cThe tax aspect is a real significant piece of a project this size,\u201d the governor said during an informal press briefing after chamber speech.<\/p>\n
At this point is unknown exactly how much money being at least partially tax-free could save the AK LNG project, but sources with extensive knowledge of the proposal say it could be in the low billions of dollars over several decades.<\/p>\n
Since February, BP, ConocoPhillips and ExxonMobil and the state have been investigating ways to keep the project on track for startup in about 2024-2025, when all involved held a press conference acknowledging a lack of progress on internal agreements and market concerns that could delay or kill it outright if the existing equal-equity share arrangement was continued.<\/p>\n
Walker further confronted hearsay that a state-led project would mean the State of Alaska would \u201cgo it alone\u201d and build the project regardless of economics.<\/p>\n
\u201cIt\u2019s not a build it and they will come,\u201d he said.<\/p>\n
Walker also emphasized that using the $54 billion Permanent Fund to pay for the project in any way is out of the question.<\/p>\n
New Alaska Gasline Development Corp. President Keith Meyer roundly dismissed that as well at the corporation\u2019s July 14 board meeting, separate from Walker\u2019s comments.<\/p>\n
He said Walker has told him using the Permanent Fund to pay for the project \u201cis not even open for discussion.\u201d<\/p>\n
Senate Resources chair Cathy Giessel, R-Anchorage said in an interview that the governor \u201cmay have jumped to conclusions that the producers said the state needs to lead this project,\u201d and that she has been told there are different approaches to moving ahead in a low price environment.<\/p>\n
\u201cI\u2019m concerned the governor wishes to drive ahead a project that is marginal at best and uneconomic at worst,\u201d Giessel said.<\/p>\n