AGDC board elects officers and gets estimates of off-take facilities costs

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The Alaska Gasline Development Corp. board of directors met Aug. 13, elected officers, approved confidentiality agreement regulations to go out for public comment and got some specifics on development costs for the off-take facilities for in-state gas access from a gas pipeline from the North Slope.

The board elected John Burns, who has been chair, as chairman, Dave Cruz as vice-chair and Hugh Short as secretary-treasurer.

The proposed AGDC confidentiality regulations specify third-party information which will be protected, including financial information such as tax returns and profit-and-loss statements; proprietary business plans; trade secrets; market surveys or marketing strategy information; and information required to be kept confidential under applicable federal or state law.

The regulations also state that contracts protecting confidentiality of information will not be treated as confidential documents.

While the regulations apply to contracts entered into after April 1, 2015, it is specified that AGDC will honor obligations under any contracts entered into prior to that date.

The regulations note that the board may meet in executive session under the state’s Open Meetings Act to consider information that may or must be kept confidential and unless the board authorizes disclosure, “all directors, officers, employees and agents of the corporation participating in an executive session of the board at which information the corporation may or must keep confidential ... is considered shall preserve the confidentiality of the information.”

The regulations say the board will endeavor, consistent with confidentiality agreements and applicable law, “to limit the amount of confidential information it withholds from the public and the time period for which information is kept confidential.”

When the board proposes to take action on contracts, the corporation will make the entirety of any contract submitted to the board for approval available to the public at least 10 days before the board meeting, including posting on the corporation’s website.

Off-take issues

The quantity, size and location of off-takes have not yet been determined, although the minimum number under Senate Bill 138 is five. AGDC President Dan Fauske told the board that the number of off-take points is being negotiated, and while five are required, the maximum number is subject to negotiation and as many as 20 have been discussed.

AGDC is working with the state gas team and AKLNG on the number and location of the flanges.

Engineering estimates were presented for four sizes of off-take facility, ranging from a facility which could handle up to 300 million cubic feet per day down to a size which could handle as little as 0.04 mmcf per day.

The macro size, for a volume of 80 mmcf to 330 mmcf per day, would cost $38 million. A mini size, handling from 20 mmcf to 75 mmcf per day would cost $28 million; a micro, handling 0.4 mmcf to 2 mmcf per day, $15 million; and a nano, handling 0.04 mmcf to 0.25 mmcf per day, $14 million.

The facilities would be skid mounted to get them into place.

The costs discussed are not the total cost of taking natural gas off the line for local use, because the cost of laterals, spurs, local distribution and conversions are not included in the cost estimates.

The flanges on the line to which such facilities would be attached are part of the cost of the pipeline and are installed during construction. Multiple flanges put in during construction provide the opportunity to connect in the future, the board was told, and the flanges can be used for in-put or off-take. The flanges are tied to gate valves, which are required every 20 miles by regulation, the board was told, so theoretically there could be a flange every 20 miles.

But however many flanges there are, they need to be installed during construction, as installing them after the line begins flowing gas would be costly and require shutting down the pipeline.

- KRISTEN NELSON