June 28, 2005 --- Vol. 11, No. 57June 2005

Parties in CIGGS dispute reach agreement

The Regulatory Commission of Alaska said Monday that it has accepted an agreement in principle reached by the parties to resolve outstanding rate and tariff issues for the Cook Inlet Gas Gathering System. The parties have 60 days to finalize the agreement.

Marathon Oil, Unocal, Agrium, the State of Alaska, Aurora Gas, Alaska Pipeline Co. and Enstar Natural Gas Co., the parties in the CIGGS dispute, notified the commission June 24 that they have executed a comprehensive agreement in principle “setting forth the principal settlement terms intended to resolve all outstanding rate and tariff issues” in two dockets before the commission.

Agrium U.S. Inc. filed complaints against Marathon and Unocal, owners of CIGGS, arguing that the pipeline should be regulated by the commission. CIGGS, which moves gas from the west side of Cook Inlet to the Kenai Peninsula, was built prior to Alaska statues requiring regulation of such pipelines. The Agrium complaint, filed in October, said Marathon and Unocal are violating the Alaska Public Utilities Regulatory Act and the Alaska Pipeline Act by providing unregulated transportation service through CIGGS.

The parties told the commission they have a detailed plan for reaching a final settlement and asked for 60 days to draft and file the final settlement agreement with the commission.

In a June 27 order the commission agreed to vacate its existing procedural schedule to allow the parties to finalize the settlement. It said the parties had requested a procedural schedule for the commission’s “consideration, acceptance, and approval” of the final settlement, and also requested that the commission allow interim transportation and approve interim terms and conditions.

The parties have until Aug. 26 to finalize and file a final settlement agreement; a public hearing on the settlement is set for Jan. 25, 2006.

As part of the agreement in principle, the commission said that Marathon and Unocal will transport gas for third-party shippers beginning Nov. 1, “unless earlier agreed” by the CIGGS owners. This transportation will be on an interim basis until the commission approves the final settlement agreement or issues a final order.

Agrium task force meeting delayed

The Governor’s Agrium Task Force cancelled its June 29 meeting, which will delay delivery of the final task force recommendations to Gov. Frank Murkowski for a week or two.

Conflicts with schedules of task force members will shift the meeting to mid-summer, according to Bill Popp, task force co-chair.

Popp said he and co-chair Bob Favretto are aiming for a high level of participation at the upcoming meeting because the panel will be approving and issuing its final recommendations.

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