State out of AGIA, has new agreement

The state of Alaska is free of the agreement it made with TransCanada in 2008 under the Alaska Gasline Inducement Act.

Gov. Sean Parnell told a Fairbanks audience June 17 that the state has “terminated the license with TransCanada under AGIA” and has completed a “traditional precedent agreement.”

That termination was negotiated in the memorandum of agreement between the Revenue and Natural Resources commissioners and TransCanada. The MOU and the Heads of Agreement between the state, the North Slope producers and TransCanada were ratified in Senate Bill 138, passed by the Alaska Legislature in April.

The AGIA project was a large-diameter pipeline proposed to take North Slope natural gas through Canada to markets in the Lower 48, a project which lost steam when Lower 48 natural gas production soared.

In 2011, Parnell asked TransCanada and the North Slope producers to look at a liquefied natural gas project. The MOU and HOA are for an LNG project in which the state, represented by TransCanada and the Alaska Gasline Development Corp., will take an equity share based on its royalty gas, and on taking production tax on natural gas in-kind.

- Kristen Nelson