Companies plan to apply for export license
JUNEAU, Alaska (AP) — The parties behind a major liquefied natural gas project in Alaska hope to file an export-license application later this year, an executive with ExxonMobil Production Co. told lawmakers Wednesday.
Bill McMahon Jr. told the Senate Finance Committee that a license would need to be in hand for the parties to make a final investment decision. The timeframe for such a decision currently around 2018 or 2019.
Lawmakers are considering legislation aimed at moving the mega-project into the phase of preliminary engineering and design. The state is mulling an equity stake of 20 percent to 25 percent in the project, the level of which would be determined by its royalty share and the gas-tax rate, which would be set in the bill. For a project currently estimated at between $45 billion and more than $65 billion, the state's share will be significant.
The bill speaks to terms already agreed upon by state officials and TransCanada Corp., the Alaska Gasline Development Corp., or AGDC, and the major North Slope players, BP, ConocoPhillips and ExxonMobil. The agreements are subject to passage of enabling legislation deemed acceptable by the parties.
The state has signed a separate agreement with TransCanada to carry its interest in a gas-treatment plant and pipeline. While the state would have an option to buy back its equity, the arrangement is seen as a way for the state to not have to shoulder as much in upfront costs as it would without TransCanada. The agreement also would serve as a transition from the Alaska Gasline Inducement Act, the law under which TransCanada has been pursuing a pipeline with Exxon Mobil but which Gov. Sean Parnell has said no longer fits with the current situation, which features a change in the type of project and the players.
An issue raised during Wednesday's hearing was whether a federal loan guarantee was still on the table. Larry Persily, the federal coordinator for Alaska gas pipeline projects, said in an interview that such a guarantee is not under consideration.
Persily said the $18-billion loan guarantee passed in 2004 and adjusted for inflation applied only to a line that would serve North American markets. While that had been a focus of TransCanada under the inducement act, the project now being pursued, because of market changes, would allow for liquefied natural gas exports overseas.