Parnell signs Alaska LNG legislation

Gov. Sean Parnell signed into law the bill authorizing the state of Alaska to participate financially in proposed $45 billion to $65 billion natural gas pipeline and liquefied natural gas export project.

Parnell’s May 8 signature on Senate Bill 138, approved by the state Legislature in April, will allow state officials to begin negotiating formal contracts with the three producers and TransCanada, a pipeline company.

The state would be a partner with producers BP, ConocoPhillips and ExxonMobil as well as TransCanada under the plan.

Parnell signed the bill in Fairbanks at the Fairbanks Pipeline Training Center, where workers have been trained to work on North Slope pipeline construction projects. State legislators and several hundred people joined the governor in the signing ceremony.

With the legislation signed the companies and the state will now begin preliminary engineering and design work on the project estimated to cost $450 million. The state will share part of that cost under SB 138.

Under the project schedule a decision on construction would come in 2019 with operations beginning in 2024. Fifteen to 18 million tons of LNG would be exported annually, mostly to Asia, from an LNG plant at Nikiski, on Cook Inlet in southern Alaska.

“For the first time we have alignment among the necessary parties, authorization from the Legislature, and the beginning of engineering and design work on a project that will create thousands of jobs and provide fuel to Alaska homes and businesses for decades,” Parnell said in a statement.

The deal provides for the state to take its royalty and tax share of production in the form of gas and to market it independently of the producers. The state share would be about 25 percent of the LNG. State officials also have said LNG marketing activities would begin this summer.

The bill passed the state Senate 16-4 and the state House 36-4 in April.

Anchorage attorney Bill Walker, who is running against Parnell for governor as an independent, expressed disappointment over the bill signing.