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State extends AGIA date for FERC filing
By KRISTEN NELSON Petroleum News
The date by which TransCanada must file a Federal Energy Regulatory Commission application for its Alaska Gasline Inducement Act project has been extended, for a second time, to Oct. 31, 2015, and summer field work approved.
The decision, signed June 11 by Dan Sullivan, commissioner of the Department of Natural Resources and Bryan Butcher, commissioner of the Department of Revenue, was a response to a June 10 request by TransCanada for approval of AGIA project amendments, including summer field work and a two-year extension of the required date for the FERC filing.
In May 2012 the commissioners approved an extension of the FERC filing deadline for two years, from Oct. 31, 2012, to Oct. 31, 2014, along with amendments of the plan under TransCanada’s AGIA license to include work with the Alaska North Slope producers in concept selection assessment for a liquefied natural gas project. Two years requested TransCanada had requested another two-year extension of the FERC filing deadline for a certificate of public convenience and necessity, to Oct. 31, 2016, but only won approval for a one-year extension.
The commissioners noted that when they approved the two-year extension last year they set conditions: conducting a solicitation of interest in the LNG alternative; consulting with the Alaska Gasline Development Corp. to avoid unnecessary duplication of spending of state funds; and completing an inventory of work related to the original overland Alaska-Alberta project.
They said the licensees “have made significant progress toward meeting these conditions,” including the solicitation of interest required in the 2012 amendment approval, which the licensees told the governor last October generated “publicly reported interest from potential shippers and major players from a broad range of industry sectors and geographic locations.”
The licensees also reported a draft framework for exchange of information with AGDC (the Alaska Legislature approved confidentiality statutes for AGDC this spring; lack of that confidentiality had limited information exchange).
The commissioners also said TransCanada has provided “an initial draft inventory of work product related to the project.” Limited extension requested TransCanada was seeking a “limited extension of the two project plan amendments” approved in 2012 specifically “to explore the LNG alternative further by performing field work on the midstream component of the project in 2013” as well as the two-year deferral of the FERC filing, the commissioners said.
They granted the request to perform the 2013 summer work, finding it “consistent with important project benchmarks” established by Gov. Sean Parnell in his January 2013 State of the State address.
The governor’s benchmark to select a concept for the Southcentral LNG project was met Feb. 15, the commissioners said. The governor also called for a full summer of field work in 2013, and the commissioners said they approved the 2013 field work because it would meet that benchmark.
With Alaska North Slope gas commercialization efforts in transition, and North Slope producers working with the AGIA parties “for the first time in a single effort,” the commissioners said approval of amendments to the AGIA license paved the way for more intensive work in the future and kept the project’s ultimate costs as low as possible by helping to avoid a delay in the project.
Based on this year’s amendment approval the commissioners said TransCanada “may submit qualified expenditures incurred in connection with the 2013 Work for reimbursement under AGIA” for the period covered in the revised work plan, timeline and budget in the 2013 amendment request.
Commenting on the one-year extension of the FERC filing requirement, rather than two years as requested, the commissioners said that given the transition of the project from overland to LNG, “we agree with the objective of avoiding unnecessary expenditures on the Alaska-Alberta project, and emphasize that any such expenditures going forward should be de minimis.”
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