A bill passed Tuesday by the Alaska Senate to buy out TransCanada Corp.’s share of the Alaska liquefied natural gas (LNG) project made it out of a House committee and was on its way to the full body Wednesday.
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Under the law, the state had the option of becoming an equal owner alongside BP, ConocoPhillips, and ExxonMobil with a buyout of the Canadian pipeline company’s stake in the project.
Lawmakers have been meeting in special session since October 24th to consider Governor Walker’s recommendation that the state buy out T-C’s 25-percent interest in the project.
Gov. Bill Walker is thanking legislators for passing a bill authorizing the buyout of one of the state’s partners in a proposed liquefied natural gas project. It also was a way for the state and company to get out a failed prior effort to advance a gas project without a messy fight. As now structured, in an arrangement that predates Walker’s administration, TransCanada would hold the state’s interest in the pipeline and gas treatment plant. The rest would be for the remaining share of the state’s cost for the current phase and costs for state agencies involved in the project.
There’s no guarantee a project will be built; a decision on that could be a few years away, and a lot has to fall in place between now and then.
Alaska faced a year-end decision on how or whether to continue its relationship with TransCanada.
The House also debated a resolution urging Walker to clearly describe who’s authorized to help the state-sanctioned Alaska Gasline Development Corp.as it participates in the gas project.
The state is obligated to pay TRP for costs it has put into the project on the state’s behalf, plus ~7% interest, regardless of whether the project succeeds or fails, an administration consultant has said.
Additionally the bill requests necessary appropriations totaling $75,600,000 related to the State’s continued participation in the Alaska LNG project. But he has concerns with the level of organization of the state’s gas team. Of that, an estimated $68 million will go to TransCanada. Assuming the buyout is approved, AGDC is expected to be in position to vote.
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Project partners are scheduled to vote December 4 on the 2016 work scope and budget.
