(SitNews) Juneau, Alaska - The Alaska LNG project is one of the largest export projects of its kind in the world and today Governor Sean Parnell welcomed news that a commercial agreement for an Alaska gasline has been signed, marking a major milestone in bringing Alaska’s gas to Alaskans and markets beyond.

The agreement, also known as a Heads of Agreement (HOA), was signed by the commissioners of Natural Resources and Revenue, ExxonMobil, BP, ConocoPhillips, TransCanada, and the Alaska Gasline Development Corporation (AGDC). The HOA will be subject to public review by the Legislature this session.

“This commercial agreement, with its transparent set of terms, is Alaska’s roadmap to developing our vast gas reserves,” Governor Sean Parnell said. “This is truly a historic achievement. Not only have all the necessary parties aligned around a single project, but we’re moving forward with a project that’s on Alaska’s terms and in Alaskans’ interests. I extend my thanks to all of the parties for the hard work that went into this agreement, and look forward to working with legislators on laying the framework to best manage our gas resources.”

Regarding today's agreement signed between the state of Alaska, TransCanada, and the state’s three major oil producers for a proposed North Slope liquefied natural gas project, U.S. Senator Lisa Murkowski said in a prepared statement, “I applaud the progress Gov. Sean Parnell’s office has made in advancing a natural gas development project,” Murkowski said. “I look forward to all parties working as quickly as possible on the engineering design of the project and to speed development of the financial framework for a project to proceed to construction.”

"This is a historic time for Alaska,” said Senator Cathy Giessel (R-Anchorage Hillside/Turnagain Arm/North Kenai)  “We have now moved the ball to the next ten yard line. Alaskans can look forward to the potential benefits of our gas here at home and abroad."

The Heads of Agreement (HOA) provides a roadmap for the Alaska liquefied natural gas (LNG) project to ramp up the Pre-Front End Engineering and Design (Pre-FEED) stage, and establishes a framework for negotiating multiple project-enabling agreements. The HOA includes the state as an equity partner, provides gas to Alaskans, lays out proposed fiscal terms, and includes pro-expansion principles that will allow third-party access to all of the project components, including possible construction of a new LNG train at the liquefaction plant.

Finally, the Heads of Agreement (HOA) ensures Alaskans’ interests are protected by outlining significant participation by AGDC, including a new subsidiary to carry the state’s interests in the project. It also recognizes that AGDC will continue to pursue its own Alaska Stand Alone Pipeline (ASAP) instate gasline project.

“This is a completely different way than we’ve ever done things before,” said Senate President Charlie Huggins (R-Wasilla).  “This is a transparent process where basic principles are agreed on up front by all parties, and then we develop principles and legislation which will guide us to a binding commercial agreement.”

Through being an equity partner in the Alaska LNG project, the State is able to guarantee several key principles important to Alaskans including affordable in-state gas, Alaska hire, an expansion policy, and a commitment to maintaining the Alaska Stand Alone Gas Pipeline (ASAP) project.

According to an Alaska Senate Majority press release, today’s announcement does not stop any progress Alaska Stand Alone Gas Pipeline (ASAP) is making with ASAP, which is an in-state gasline designed to provide affordable natural gas to Alaskans.  

“This is what getting a big project done looks like,” said Senate Finance Co-Chair Pete Kelly (R-Fairbanks).  “Whether we take baby steps or giant steps, the important thing is we are always taking the necessary steps to build that gas line.  The Governor, the Legislature, and the associated people in the private sector are in a mode where we wake up every day and say: ‘What needs to be done today to build that line?’  This thing is going to happen."

“I’m pleased to see this tangible evidence of alignment among all stakeholders in an Alaska gas project,” said Representative Mike Hawker (R-Anchorage). “We’ve tried many times to advance gas commercialization, but this is different. The stakeholders are working as partners with common interests, rather than as adversaries. While the Governor’s legislation enabling alignment will require extensive deliberation through our committee process, I believe we will find the best possible balance of protecting Alaskans’ interests and facilitating a commercial project.” 

“The progress on a gasline is exactly what I envisioned four years ago with HB 369 – alignment between commercial interests and Alaska’s needs,” House Speaker Mike Chenault, (R-Nikiski) said. “I’m enthused, but will keep in mind that a decision to build a gasline is still years away. Meanwhile, it’s important that AGDC continue progressing an instate gas pipeline. The best line is a big line in partnership with industry, but Alaska must be ready to take care of Alaskans if a big line doesn’t meet industry’s commercial benchmarks down the road.”

Hawker and Chenault’s long engagement in Alaska natural gas issues most recently led to sponsoring House Bill 4, which the Legislature passed in 2013. The bill provides the statutory framework for AGDC to become a stand-alone, independent state corporation charged with getting Alaska gas to Alaskans.

U.S. Senate candidate and former Alaska Department of Natural Resources Commissioner Dan Sullivan said in a prepared statement, “Today's agreement between the state of Alaska, producers, Alaska Gas Development Corporation and TransCanada is great news for Alaskans.  Congratulations to Governor Parnell and Commissioners Balash and Rodell,” Sullivan said. “Beginning with the Pt. Thomson settlement and the benchmarks laid out by Governor Parnell, I am proud to have played a key role in the significant gas line progress made to date. When elected to the U.S. Senate, I look forward to working closely with the state to advance this critical project which will get affordable gas to Alaskans, create thousands of new jobs and export our abundant resources to global markets.”

Today’s announcement includes components which guarantee the State will be a full partner in a large-diameter gasline project as it goes forward.   One component is a Heads of Agreement (HOA) between the State, the Alaska Gasline Development Corporation (AGDC), ConocoPhillips, BP, ExxonMobil, and TransCanada which states all parties are in alignment and represents the first step on the path to full legally binding contracts and sets out roles and responsibilities of the parties before finalized contracts are drawn up.

On the Web:

A copy of the Heads of Agreement
http://www.dor.alaska.gov/Portals/5/Docs/PressReleases/HOA.pdf

Source of News: 

Office of the Governor
www.gov.state.ak.us

Office of U.S. Senator Lisa Murkowski
www.murkowski.senate.gov

Alaska Senate Majority
akleg.gov

Alaska House Majority Caucus
akleg.gov

Dan Sullivan for Senate Campaign
www.Sullivan2014.com

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