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State funding on its way to ANGDA Alaska legislators approve immediate $1.65 million for gas line efforts Larry Persily Petroleum News Government Affairs Editor
It took almost three months for the Alaska Legislature to agree on supplemental funding for the state-owned natural gas pipeline effort, but the measure is now on its way to the governor for his signature and the money could be available within a few days.
The Senate on April 5 concurred with House changes to the legislation, appropriating $1.65 million to be shared by the Alaska Natural Gas Development Authority and the Department Revenue. The department will share its money with the departments of Law and Natural Resources to cover the state’s cost of negotiating long-term fiscal contracts with private companies also looking to build a North Slope natural gas project.
The $1.65 million is to cover the state’s immediate needs for consultant contracts and staff expenses, and is separate from the governor’s almost $10 million request to lawmakers April 2 to continue and expand Alaska’s gas line efforts through at least June 2005.
Alaska’s push to determine the feasibility of a state-owned pipeline is running concurrently with its negotiations with the North Slope producers and others interested in building a privately owned line to move Alaska gas to market.
The state gas authority said at the start of the legislative session it needed $2.15 million for its proposed liquefied natural gas project. The administration later expanded the funding request to also include its negotiating costs with potential private developers. Senate accepts House funding level The Senate last month approved a combined $1 million supplemental budget for the state’s coordinated work effort. The House then battled over amendments to increase the amount and, after a 20-20 tie on one proposal, settled on $1.65 million, which the Senate accepted April 5 on a 19-1 vote.
The appropriation measure, Senate Bill 241, includes a statement of legislative intent that at least $650,000 of the money go toward the state gas authority.
The lone senator to vote against the spending was Anchorage Republican Con Bunde. “I guess I’ve got a three-word answer” for the vote, the senator said, listing the Matanuska Dairy, Alaska Seafood International plant and Delta barley project as past unsuccessful attempts by the state to get into business ventures.
With the arrival of more funding, the Alaska Natural Gas Development Authority will move quickly to contract for a study of its financing options. A consultant will look at debt and equity ratios, interest rates and how the authority’s possible tax structure could affect financing, said Harold Heinze, chief executive officer.
“Which combination of those things gets you to the lowest cost of business,” Heinze said.
Second on the work list is a contract to prepare a cost estimate for spur line to deliver North Slope gas to Cook Inlet, which is running low on its own supplies, Heinze said.
Next on the authority’s list would be a study to determine the potential value of possibly buying Yukon Pacific Corp.’s permits from its 20-year failed attempt to build an Alaska gas project, followed by a cost estimate for a liquefied natural gas shipping terminal at Valdez.
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