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State of Alaska hunts for pipeline expert
The Associated Press
The state is searching for a financial adviser to plan Alaska’s partial ownership of a proposed North Slope natural gas pipeline.
The adviser also would help state negotiators figure out how federal loan guarantees approved by Congress last year could be used to bring down the cost of building the pipeline, which has been pegged at $20 billion, deputy revenue commissioner Steve Porter said.
On June 22, the Department of Revenue issued notice that it would be taking bids from firms until July 15, with the contract to begin on July 29.
The adviser would immediately enter fiscal negotiations the state is holding with three groups under Alaska’s Stranded Gas Act: the producer group of BP, Conoco Phillips and ExxonMobil, along with TransCanada and the pending application filed by the Alaska Gasline Port Authority.
A pipeline to ship the approximately 35 trillion cubic feet of known North Slope natural gas reserves has been long sought by Alaska officials but rejected in the past as being too costly. Interest has been renewed with high gas prices, federal loan guarantees of 80 percent of the project’s cost, as well as Alaska’s seeming willingness to take part of the ownership cost and risk.
The producer group and TransCanada have proposed routes taking a pipeline through Canada and to markets in the Midwest. Besides setting fiscal terms with Alaska for the next 30 to 40 years, an acceptable Canadian regulatory process is one of the conditions the producers have set before moving forward with a proposal.
The port authority’s pipeline would stretch to Valdez, where the gas would be liquefied and shipped by tanker to markets on the West Coast. That proposal took a hit when its possible buyer, Sempra Energy Co., said in May that it was pulling out of the deal. Will keep Government Finance Associates Porter said the state will keep its current financial adviser, Government Finance Associates Inc., but negotiators also need an expert on pipeline projects. The new adviser will conduct a broader analysis that “could redirect how we’re looking,” Porter said.
The state has proposed taking ownership of 20 percent to 25 percent of the pipeline, depending on the project. The adviser would recommend how to structure the equity ownership and how to fund it, Porter said.
Gov. Frank Murkowski has said he’d like to have a stranded gas contract proposal in writing in late summer or early fall. Spokeswoman Becky Hultberg said June 22 that timetable has not changed.
Murkowski was in Washington, D.C., on June 22 attending gas line meetings with the producers, TransCanada and Canadian government officials and could not be reached by the Associated Press for comment. (See related story on page 1 of this issue.)
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