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Parnell sets new benchmarks for gas pipeline

Published on NewsOK Modified: January 16, 2013 at 11:17 pm •  Published: January 16, 2013

JUNEAU, Alaska (AP) — Gov. Sean Parnell on Wednesday set new benchmarks for progress on a major natural gas pipeline project in Alaska and urged lawmakers to act this year on legislation to change the state's oil tax structure.

In his fourth State of the State address, Parnell told a joint session of the Legislature that he wants the companies involved in advancing a long-hoped-for gas line project to settle on a concept by Feb. 15. That is, he wants details, like the project's size, the location of the gas treatment plant, the size and scope of a liquefaction plant, and the number of off-take points where gas can be diverted for use in-state.

By spring, he said he wants the companies to finalize an agreement to move into a stage that would include preliminary engineering and a financing plan. He also wants a full summer of field work to begin this year.

It was in Parnell's State of the State speech last year that he set benchmarks for progress that helped jumpstart the seemingly stalled project. The North Slope's three major players and TransCanada Corp. agreed to pursue a liquefied natural gas project capable of overseas exports that they have said could cost more than $65 billion. But they haven't announced specifics and haven't committed to build. They said last fall that "significant environmental, regulatory, engineering and commercial work remains to reach upcoming decisions to bring North Slope gas to market."

The oil companies have sought greater long-term certainty on Alaska oil and gas taxes, and have made clear that's a key element as they move ahead with any project. Parnell last year said that if companies met his benchmarks, the state could look at gas taxes this year.

Parnell is proposing an overhaul of the state's oil tax structure, which he has said is simpler than the current system and is aimed at encouraging new production and making Alaska more competitive. Oil production is declining, and while there is a shared goal at the Capitol to reverse that trend, there is disagreement over how best to do that. Some Democrats have already blasted Parnell's proposal as a repackaged version of his prior tax-cut bills, and as a giveaway to oil companies.

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