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TransCanada transfer to state final
Gov. Bill Walker said Nov. 24 that the state’s acquisition of TransCanada’s share of the Alaska LNG project is final. The governor said Department of Natural Resources Commissioner Mark Myers finalized termination of the agreement under which TransCanada held the state’s share of the midstream - the North Slope gas treatment plant and the pipeline - for the AKLNG project.
The state had an opportunity to buy out TransCanada’s participation by the end of the year, paying the company for the work it did on behalf of the state, and the Legislature authorized the monies needed in the special session which ended Nov. 5.
Because TransCanada held the state’s share in the GTL and pipeline it voted for the state on midstream issues and the potential existed for a split state/TransCanada vote on issues affecting the entire project.
The governor has long said that he believes the state should have a role in the project reflecting its share of the natural gas, estimated at 25 percent with royalties taken as gas and gas in lieu of taxes.
“By gaining an equal seat at the negotiating table, we are taking control of our destiny and making significant progress in our effort to deliver Alaska gas to the global market,” Walker said in a statement.
2014 precedent agreement The precedent agreement between DNR and TransCanada was signed in June 2014. It authorized TransCanada to pay upfront capital costs and hold the state’s 25 percent share of ownership in the GTP and pipeline.
Myers said the termination enables the state “to have more direct input to the decision-making process, which will be important as this project is pivotal for the future of the State, both in terms of potential revenue and gas for Alaskans.”
A study by DNR consultants found that by terminating the relationship with TransCanada state revenues from the project would increase by as much as $400 million annually once the project goes into operation. This is based on the Department of Revenue’s expectation that the state can finance its share of AKLNG midstream costs more cheaply than could TransCanada.
As of Nov. 24, DNR paid the termination account of $64.6 million and TransCanada transferred its participation interests to the Alaska Gasline Development Corp.
- Kristen Nelson
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