HB 132: "An Act relating to the support of the Alaska liquefied natural gas project by the Alaska Gasline Development Corporation."
00 HOUSE BILL NO. 132 01 "An Act relating to the support of the Alaska liquefied natural gas project by the Alaska 02 Gasline Development Corporation." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 31.25.005 is amended to read: 05 Sec. 31.25.005. Purpose. The corporation shall, for the benefit of the state, to 06 the fullest extent possible, 07 (1) develop and have primary responsibility for developing natural gas 08 pipelines, an Alaska liquefied natural gas project, and other transportation mechanisms 09 to deliver natural gas in-state for the maximum benefit of the people of the state; 10 (2) when developing natural gas pipelines, an Alaska liquefied natural 11 gas project, and other transportation mechanisms to deliver natural gas in-state, 12 provide economic benefits in the state and revenue to the state; 13 (3) assist the Department of Natural Resources and the Department of 14 Revenue to maximize the value of the state's royalty natural gas, natural gas delivered
01 to the state as payment of tax, and other natural gas received by the state; 02 (4) subject to (b)(1) of this section, advance an in-state natural gas 03 pipeline as described in the July 1, 2011, project plan prepared under former 04 AS 38.34.040 by the corporation while a subsidiary of the Alaska Housing Finance 05 Corporation, with modifications determined by the corporation to be appropriate to 06 develop, finance, construct, and operate an in-state natural gas pipeline in a safe, 07 prudent, economical, and efficient manner, for the purpose of making natural gas, 08 including propane and other hydrocarbons associated with natural gas other than oil, 09 available to Fairbanks, the Southcentral region of the state, and other communities in 10 the state at the lowest rates possible; 11 (5) subject to (b)(2) of this section, advance an Alaska liquefied 12 natural gas project by developing infrastructure and providing related services, 13 including services related to transportation, liquefaction, a marine terminal, marketing, 14 and commercial support; if the corporation provides a service under this paragraph to 15 the state, a public corporation or instrumentality of the state, a political subdivision of 16 the state, or another entity of the state, the corporation may not charge a fee for the 17 service in an amount greater than the amount necessary to reimburse the corporation 18 for the cost of the service; 19 (6) endeavor to develop natural gas pipelines and other transportation 20 mechanisms to deliver natural gas, including propane and other hydrocarbons 21 associated with natural gas other than oil, to public utility and industrial customers in 22 areas of the state to which the natural gas, including propane and other hydrocarbons 23 associated with natural gas other than oil, may be delivered at commercially 24 reasonable rates; and 25 (7) endeavor to develop natural gas pipelines and other transportation 26 mechanisms that offer commercially reasonable rates for shippers and access for 27 shippers who produce natural gas, including propane and other hydrocarbons 28 associated with natural gas other than oil, in the state. 29 * Sec. 2. AS 31.25.005 is amended by adding a new subsection to read: 30 (b) The corporation may not plan or take any step to develop 31 (1) an in-state natural gas pipeline through which over 50 percent of
01 gas is intended to be exported as gas or liquefied natural gas and that is described in 02 (a)(4) of this section before the earliest of 03 (A) the date that the state or another party withdraws from an 04 Alaska liquefied natural gas project described in (a)(5) of this section to which 05 the state was a party on February 1, 2015; 06 (B) the date that the state and other parties enter a front-end 07 engineering and design study for an Alaska liquefied natural gas project 08 described in (a)(5) of this section to which the state was a party on February 1, 09 2015; or 10 (C) July 1, 2017; or 11 (2) an Alaska liquefied natural gas project described in (a)(5) of this 12 section other than a project to which the state was a party on February 1, 2015, before 13 the earliest of 14 (A) the date that the state or another party withdraws from an 15 Alaska liquefied natural gas project described in (a)(5) of this section to which 16 the state was a party on February 1, 2015; 17 (B) the date that the state and other parties enter a front-end 18 engineering and design study for an Alaska liquefied natural gas project 19 described in (a)(5) of this section to which the state was a party on February 1, 20 2015; or 21 (C) July 1, 2017. 22 * Sec. 3. AS 31.25.080 is amended by adding a new subsection to read: 23 (h) The corporation may not market gas owned or controlled by an entity other 24 than itself without express written consent from that entity. 25 * Sec. 4. AS 31.25.100 is amended to read: 26 Sec. 31.25.100. In-state natural gas pipeline fund. The in-state natural gas 27 pipeline fund is established in the corporation and consists of money appropriated to 28 it. The corporation shall determine fund management and may contract with the 29 Department of Revenue for fund management. Unless otherwise provided by law, 30 money appropriated to the fund lapses into the general fund on the day this section is 31 repealed. Interest and other income received on money in the fund shall be separately
01 accounted for and may be appropriated to the fund. The corporation may use money 02 appropriated to the fund without further appropriation for the cost of managing the 03 fund and for the planning, financing, development, acquisition, maintenance, 04 construction, and operation of the in-state natural gas pipeline described in 05 AS 31.25.005(a)(4) [AS 31.25.005(4)] and for the purposes of AS 31.25.005(a)(4), 06 (6), and (7). The corporation may not expend money from the fund to plan or 07 take any step to develop an in-state natural gas pipeline through which over 50 08 percent of gas is intended to be exported as gas or liquefied natural gas and that 09 is described in AS 31.25.005(a)(4) before the earliest of 10 (1) the date that the state or another party withdraws from an 11 Alaska liquefied natural gas project described in AS 31.25.005(a)(5) to which the 12 state was a party on February 1, 2015; 13 (2) the date that the state and other parties enter a front-end 14 engineering and design study for an Alaska liquefied natural gas project 15 described in AS 31.25.005(a)(5) to which the state was a party on February 1, 16 2015; or 17 (3) July 1, 2017 [IN AS 31.25.005(4), (6), AND (7)]. 18 * Sec. 5. AS 31.25.390(1) is amended to read: 19 (1) "Alaska liquefied natural gas project" means a natural gas project 20 as described in AS 31.25.005(a)(5) [AS 31.25.005(5)] that includes collectively, the 21 Prudhoe Bay unit gas transmission line, the Point Thomson unit gas transmission line, 22 a gas pipeline, the gas treatment plant, a liquefied natural gas plant, and a marine 23 terminal; in this paragraph, 24 (A) "gas pipeline" 25 (i) means the main natural gas pipeline from the outlet 26 flange of the gas treatment plant on the North Slope to the inlet flange 27 of the liquefied natural gas plant located in the Southcentral region of 28 the state, which shall have offtake points along the pipeline for 29 deliveries of gas in the state; 30 (ii) does not include any gas lines downstream of any 31 offtake point between the gas treatment plant and the liquefied natural
01 gas plant; 02 (B) "gas treatment plant" means those facilities and related 03 activities required to receive natural gas from the Prudhoe Bay unit gas 04 transmission line, the Point Thomson unit gas transmission line, and other 05 facilities, treat the natural gas to pipeline specifications, dispose of or deliver 06 by-products, deliver liquid products for further transportation, and deliver 07 treated natural gas for transportation through the gas pipeline; 08 (C) "liquefied natural gas plant" means the facility for 09 liquefying natural gas and includes structures, equipment, underlying land 10 rights, other associated systems, storage, and facilities for off-loading liquefied 11 natural gas; 12 (D) "marine terminal" means the terminal and those facilities 13 required to receive liquefied natural gas from the boundary of the liquefied 14 natural gas plant for marine transportation, including auxiliary vessels used in 15 the operation of the terminal; 16 (E) "Point Thomson unit gas transmission line" means a natural 17 gas transmission line from the outlet flange of the Point Thomson unit 18 production facility to the inlet flange of the gas treatment plant; and 19 (F) "Prudhoe Bay unit gas transmission line" means a natural 20 gas transmission line from the outlet flange of the Prudhoe Bay unit central gas 21 facility to the inlet flange of the gas treatment plant; 22 * Sec. 6. AS 31.25.390 is amended by adding a new paragraph to read: 23 (8) "front-end engineering and design study" means a study that 24 includes 25 (A) sufficiently detailed basic engineering packages for the 26 components of the Alaska liquefied natural gas project and a contracting 27 strategy to enable contractor bidding for the engineering, procurement, and 28 construction contracts; 29 (B) a resourcing, commissioning, and start-up plan; 30 (C) the finalization of the key project agreements required to 31 implement the Alaska liquefied natural gas project;
01 (D) a technical and commercial definition of the Alaska 02 liquefied natural gas project; 03 (E) a detailed update of the Alaska liquefied natural gas project 04 economics, financing, and commercial assumptions, including an updated 05 estimate of capital costs sufficient for a final investment decision; 06 (F) a final assessment of the environmental, social, and health 07 effects of the Alaska liquefied natural gas project; 08 (G) a description of long-lead procurement activities; 09 (H) a description of other activities necessary to enable a final 10 investment decision to be taken on the Alaska liquefied natural gas project, 11 including financing, permitting, and registration information; and 12 (I) the bidding and internal selection of engineering, 13 procurement, and construction contractors, if applicable.