NEWS BULLETIN

September 14, 2005 --- Vol. 11, No. 73September 2005

State delivers gas line contract terms to producers

“Yesterday we transmitted a comprehensive draft proposal” for a gas line contract to the producers, Gov. Frank Murkowski told the Alaska State Chamber of Commerce this afternoon.

The governor said he expects to hear back next week.

The proposal included the six principles the governor has set out for a gas pipeline contract: a fair share of revenue from the project to Alaska; opportunity for Alaskans to access the gas; access to the gas pipeline for future explorers; an expandable gas pipeline; state equity ownership in the line; and jobs and job training for Alaskans.

“Each side has made its position on the issues clear during the months of negotiations — particularly during the last two months of intense negotiations,” the governor said in a news release after his speech.

The governor told the state chamber that the state’s equity participation would be about $4 billion, with an estimated billion of that in cash and the rest from a debt issue. Participation in the line, the governor said, would mean a share of the wealth to the state. Also, he said, the state wouldn’t face the years of litigation it has had over tariffs on the oil pipeline. “We as a partner would not have that particular exposure,” Murkowski said, although, he noted, the state would share in the risk associated with project cost overruns and changing prices for gas.

The documentation which went to the producers includes a proposal “to restore some form of municipal revenue sharing using those gas line monies,” the governor told the state chamber.

And, he said, the four take-off points along the line (the Yukon River, Fairbanks, Delta and Glennallen) would allow spur lines into Southcentral Alaska and to Valdez for liquefaction, “an alternative that would be available in any contract commitment that is negotiated with the state.” Other projects, he said, could go ahead based on their “individual economics … so we are not precluding basically any of the other alternatives.”


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