Legislators get Parnell admin LNG update

Kristen Nelson

Petroleum News

Alaska legislators got an update on the Alaska LNG project from outgoing Parnell administration officials Nov. 28. While most of the Joint Legislative Budget and Audit Committee hearing was in executive session, overheads provided for the public portion of the hearing provided an overview of where the project is and what state officials expect to happen next.

On the issue of holding most of the hearing in executive session, Sen. Anna Fairclough, R-Eagle River, LB&A chair, said in a statement issued after the hearing that when the Legislature passed Senate Bill 138, legislators anticipated “that the Legislature would need to be briefed on sensitive information to protect Alaska’s interest in the LNG project on behalf of the people of our state.”

“It is critical that this information remain confidential so we, as the State participant in the project, aren’t tipping our hand to the producers and other partners on our strategy and therefore undermine the State’s interest.”

She said it is also the job of the “Legislature to be informed and understand why certain decisions and commitments have been made, understand the work that has been done to date for the future development of the LNG project, as well as provide input on the process and decision making.”

To participate in the executive session legislators and staff were required to sign confidentiality agreements.

Rep. Mike Hawker, R-Anchorage, LB&A vice chair, said that in passing SB 138 the Legislature “mandated confidential legislative briefings on the AKLNG project. It is right and appropriate that we receive a status briefing in accordance with the rules we established as part of the transition of administrations.”

In the public briefing, by outgoing Natural Resources Commissioner Joe Balash and outgoing Revenue Commissioner Angela Rodell, the commissioners said the state believes the pre-FEED, preliminary front end engineering and design, phase, requires “term sheets for key project terms” by the second quarter of 2015, with a royalty in kind decision in April, final fiscal agreement and potentially other key agreements by August, a special session of the Legislature in the fall of 2015 and final enabling agreement to move into FEED in the first quarter of 2016.

The public release of agreements would occur in August 2015, followed by the special session in October and a FEED decision in the first quarter of 2016.