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January 10, 2014 --- Vol. 20, No. 3January 2014

State, TransCanada agree to drop AGIA

Alaska Gov. Sean Parnell told the Alaska Support Industry Meet Alaska conference this morning that the state and TransCanada have “amicably” agreed to drop the state’s contract with TransCanada under AGIA, the Alaska Gasline Inducement Act, and move forward in a standard commercial agreement with the North Slope producers, a new subsidiary of the Alaska Gasline Development Corp. and the departments of Natural Resources and Revenue.

The governor said these changes are designed to move a liquefied natural gas project forward with state partnership.

“We have agreed to amicably terminate our involvement with TransCanada under AGIA but sign up with TransCanada in a more traditional commercial arrangement, along with the producers and AGDC,” the governor said.

He said TransCanada has agreed to a debt-equity structure that will protect Alaskans.

Parnell said he expects a “heads of” agreement to be signed shortly by Exxon, BP, ConocoPhillips, TransCanada, AGDC and the departments of Revenue and Natural Resources, an agreement which will be “subject to public review by the Legislature this session.”

The governor said he would also ask legislators to switch from a variable net tax to a flat gross tax for North Slope natural gas, and allow certain leases to pay production taxes with natural gas.

—KRISTEN NELSON

See story in Jan. 19 issue, available online at 11 a.m., Friday, Jan. 17, at www.PetroleumNews.com

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