Alaska LNG Project Takes Step Forward

Governor Sean Parnell

Joined by hundreds of Alaskans, including pipefitters, skilled workers, apprentices, welders, and legislators, Governor Sean Parnell on Thursday moved Alaska one step closer to a gasline by signing Senate Bill 138. Introduced by the governor, SB 138 advances a large-diameter Alaska natural gas pipeline project and empowers Alaska to become an owner in the Alaska LNG Project, and get North Slope gas to Alaskans first using local hire.

Today, we take a significant step toward getting Alaska’s gas to Alaskans,” Governor Parnell said. “Alaskans’ dream of a natural gas pipeline is now closer to becoming reality. For the first time, we have alignment among the necessary parties, authorization from the Legislature, and the beginning of engineering and design work on a project that will create thousands of Alaska jobs, and fuel Alaska homes and businesses for decades to come.

Senate Bill 138 Specifics

In addition to setting Alaska on a path to become an owner in the Alaska LNG Project, SB 138 empowers the Alaska Gasline Development Corporation (AGDC) to carry the state’s interests in the project’s infrastructure, mainly the liquefaction and marine facilities.

The legislation also creates a fund for critical infrastructure development and requires the Alaska Energy Authority to provide a plan to deliver more affordable energy to areas of Alaska that are not expected to have direct access to a natural gas pipeline from the North Slope.

SB 138 includes a letter of intent to ensure Alaska residents, contractors and businesses are hired as the Alaska LNG Project progresses. Specifically, the letter supports the “Alaska Hire” language laid out in the Heads of Agreement that was signed in January by the State of Alaska, AGDC, the companies that have Alaska gas under lease, and TransCanada.

Local Communities

Additionally, the bill provides more flexibility to municipalities by removing a current restriction on mill rates for the municipal operating budget for communities with oil and gas properties. In turn, municipalities will be able to use more property tax revenues for critical services for their residents.

In March, Governor Parnell signed Administrative Order 269, establishing the Municipal Advisory Gas Project Review Board. The review board will ensure local participation in an Alaska gasline by providing a meaningful venue for mayors, communities and the state to work together.

Next steps

In the coming weeks, formal commercial agreements will be finalized by AGDC, the companies and TransCanada, allowing the project to advance into the Pre-Front End Engineering and Design (Pre-FEED) phase.

A summer field season has commenced where millions of private sector dollars will be spent, and hundreds of Alaskans will be put to work on refining the cost and engineering aspects of the project. The Alaska LNG Project will begin pursuing key permits in the coming months.

Work will also continue on assessing where off-takes will be needed to get gas to Alaskans. Additionally, the State of Alaska, as well as the companies, will begin exploring potential markets for North Slope gas, both in state and abroad.

I commend legislators for working with our administration to advance SB 138 and lay the groundwork for the Alaska LNG Project to get Alaska’s gas to Alaskans,” Governor Parnell said. “When future generations of Alaskans look back, they will remember 2014 as the year the Alaska LNG Project began.”

Press Release, May 9, 2014; Image: gov.state.ak
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