AGDC officially takes over AKLNG

The state-owned Alaska Gasline Development Corp. is on track to take over the industry-led Alaska LNG Project. AGDC’s board gave approval Dec. 21 for the corporation to sign two agreements on the handover and to complete negotiations on two others.

The first agreement gives AGDC access to the project’s preliminary engineering and environmental information compiled during the pre-Front End Engineering and Design, or pre-FEED, phase of the project, which is now complete.

A second allows it to formally notify the Federal Energy Regulatory Commission of the change in project status. Two other agreements are still pending, one giving the state rights to land for a liquefied natural gas plant on the Kenai Peninsula now owned by the North Slope producers, and a second allowing AGDC to take over an LNG export license granted by the U.S. Department of Energy.

AGDC began the transition earlier this year after Gov. Bill Walker reached agreement with the industry partners in Alaska LNG, BP, ConocoPhillips and ExxonMobil, for the state to take the project over. AGDC had previously been a part of the gas project consortium, but it will now own 100 percent.

An immediate work item for the state corporation is to respond to a lengthy series of questions from federal agencies on resource reports prepared by Alaska LNG for its preliminary application for a FERC license for the project. The state corporation must now respond to the agency questions, complete the application and file it.

AGDC has about $30 million appropriated for work on the Alaska LNG Project as well as $70 million appropriated for the Alaska Stand-Alone Project, or ASAP, a backup project plan the state developed in case the larger project falters.

Some legislators have questioned whether the state gas corporation can shift funds from one project appropriation to another.

- TIM BRADNER