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Summer target date for ANGDA report Alaska gas authority hiring consultants to help with project plan Larry Persily PN Government Affairs Editor
As it works toward a summer target date for submitting its project development plan to legislators, the Alaska Natural Gas Development Authority has a list of 21 possible consulting contracts it wants to issue by the end of the fiscal year on June 30. (See related ANGDA story by Larry Persily on page 16.)
The authority has about $700,000 available for the contracts.
The 2002 voter initiative that created the state gas authority set a deadline for the project development plan one year after the board began its work. The seven-member board started meeting last summer, looking to put together a plan for a state-owned pipeline to move North Slope natural gas to Valdez and build a liquefaction plant to serve Pacific Rim markets. Board members meeting May 10 in Anchorage approved a work plan authorizing Chief Executive Officer Harold Heinze to spend almost 20 percent of the money on determining the cost, regulatory and other issues of a spur line to bring North Slope gas to Cook Inlet. Residential and industrial customers in Anchorage and on the Kenai Peninsula worry that declining Cook Inlet production could leave them woefully short of gas by the end of the decade.
Heinze reported to the board that he hopes to have the feasibility report on the main gas line and LNG project completed by mid-August, with a separate development plan for the Cook Inlet spur line completed at about the same time. Regardless whether it proceeds with the bigger LNG project, the state gas authority could function as a public utility, Heinze explained, bringing gas to multiple users in the Cook Inlet area. Spur line plans on work list If the North Slope producers and/or other companies decide to go ahead and build the main line to take Alaska gas into Canada for distribution throughout North America, the state authority still could take on the project of building just the spur line to bring some of the gas to Cook Inlet.
The estimated $125,000 in contracts for spur line cost estimates, financing, regulatory issues and a project coordinator are listed among the gas authority’s priority work assignments, Heinze said. He had not awarded any of the contracts as of May 18, but expected to select the consultants soon to meet his August completion date.
Other priority contracts Heinze expects to issue soon are five consulting assignments, at an estimated $125,000 total, for plant concept design, project and permit reviews and a coordinator for the proposed LNG plant at Valdez.
Of the 21 proposed contracts Heinze presented to the board May 10, 14 are budgeted at $25,000, the threshold under state contracting rules for avoiding formal bidding procedures. At that level, phone solicitations are adequate, and no advertising of the contracts is required. Professional service contracts in excess of $25,000 require a formal competitive bid process. Financial consultants Heinze also told the board he wants to move quickly to award $100,000 in contracts for consultants to assist the authority in learning more about financing options and setting up a business structure to maximize its chances of obtaining tax-exempt status from the Internal Revenue Service. And he estimated the authority will need to spend $150,000 for consultants on tax issues, funding alternatives and other financial advice.
Other contracts on the list include analysis of markets for Alaska natural gas and dealing with federal Jones Act requirements for U.S. vessels to ship Alaska LNG to California markets.
Heinze also informed the board at the end of the meeting that he wants a “significant” raise. He was hired last summer at $78,828 a year. “I’m at the short end of the stick,” Heinze said, referring to the $175 an hour the Legislature is paying its gas line consultant and the $3,500 a day the state is paying its lead negotiator in gas line talks with North Slope producers.
Board Chairman Andy Warwick appointed a subcommittee to review Heinze’s salary.
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