JUNEAU, Alaska (AP) — An agreement to advance a liquefied natural-gas project represents a "groundbreaking achievement" for Alaska, Revenue Commissioner Angela Rodell said Monday.
But the project is far from a done deal, with several decision points over the next few years in which the state — or any of the other parties — can step away.
Administration officials on Monday gave lawmakers an overview of the agreement, which includes the state, TransCanada Corp., the Alaska Gasline Development Corp. (AGDC) and the North Slope's major players: BP PLC, ConocoPhillips and ExxonMobil Corp.
This year, lawmakers are being asked to pass legislation introduced by Gov. Sean Parnell that would set general tax terms and allow the project to move through a phase involving preliminary engineering and design and refinement of project costs. That phase is expected to cost more than $400 million among the parties, with Alaska's share between $70 million and $90 million.
A fiscal note attached to the bill estimates more than $80 million would go into a new fund and be drawn on by a subsidiary of AGDC. The legislation outlines the creation of both the fund and a subsidiary that would carry Alaska's interest in things such as liquefaction facilities and marine terminal facilities.
Mike Pawlowski, a deputy revenue commissioner, said the fiscal notes are at the upper end of the costs laid out by Parnell. He expects that figure to be refined as the bill goes through the legislative process.
The state is pursuing an equity share in the project as a way of protecting Alaska's interests. The commercial agreement, which has been described as a broad roadmap for a way forward, anticipates the state's equity share at 20 to 25 percent.
The enabling legislation would move from a net tax to gross tax on gas, and set the rate at 10.5 percent on gas. That, combined with royalties, would determine the state's participation rate.
The state also would have to pay its way on construction costs, commensurate to its stake in the project, Pawlowski told members of the Senate Finance Committee. But he said later it would not be, say, a $9 billion appropriation. Recognizing the costs, the state is bringing in partners like TransCanada and AGDC, and financing structures — like debt and equity terms — can help carry some of the state's interest.