Enrolled HB 132: Relating to the purpose, powers, and duties of the Alaska Gasline Development Corporation related to the Alaska liquefied natural gas project and an in-state natural gas pipeline; relating to the in-state natural gas pipeline fund; and providing for an effective date.
00Enrolled HB 132 01 Relating to the purpose, powers, and duties of the Alaska Gasline Development Corporation 02 related to the Alaska liquefied natural gas project and an in-state natural gas pipeline; relating 03 to the in-state natural gas pipeline fund; and providing for an effective date. 04 _______________ 05 * Section 1. AS 31.25.005 is amended to read: 06 Sec. 31.25.005. Purpose. The corporation shall, for the benefit of the state, to 07 the fullest extent possible, 08 (1) develop and have primary responsibility for developing natural gas 09 pipelines, an Alaska liquefied natural gas project, and other transportation mechanisms 10 to deliver natural gas in-state for the maximum benefit of the people of the state; 11 (2) when developing natural gas pipelines, an Alaska liquefied natural 12 gas project, and other transportation mechanisms to deliver natural gas in-state, 13 provide economic benefits in the state and revenue to the state;
01 (3) assist the Department of Natural Resources and the Department of 02 Revenue to maximize the value of the state's royalty natural gas, natural gas delivered 03 to the state as payment of tax, and other natural gas received by the state; 04 (4) subject to (b)(1) of this section, advance an in-state natural gas 05 pipeline as described in the July 1, 2011, project plan prepared under former 06 AS 38.34.040 by the corporation while a subsidiary of the Alaska Housing Finance 07 Corporation, with modifications determined by the corporation to be appropriate to 08 develop, finance, construct, and operate an in-state natural gas pipeline in a safe, 09 prudent, economical, and efficient manner, for the purpose of making natural gas, 10 including propane and other hydrocarbons associated with natural gas other than oil, 11 available to Fairbanks, the Southcentral region of the state, and other communities in 12 the state at the lowest rates possible; 13 (5) subject to (b)(2) of this section, advance an Alaska liquefied 14 natural gas project by developing infrastructure and providing related services, 15 including services related to transportation, liquefaction, a marine terminal, marketing, 16 and commercial support; if the corporation provides a service under this paragraph to 17 the state, a public corporation or instrumentality of the state, a political subdivision of 18 the state, or another entity of the state, the corporation may not charge a fee for the 19 service in an amount greater than the amount necessary to reimburse the corporation 20 for the cost of the service; 21 (6) endeavor to develop natural gas pipelines and other transportation 22 mechanisms to deliver natural gas, including propane and other hydrocarbons 23 associated with natural gas other than oil, to public utility and industrial customers in 24 areas of the state to which the natural gas, including propane and other hydrocarbons 25 associated with natural gas other than oil, may be delivered at commercially 26 reasonable rates; and 27 (7) endeavor to develop natural gas pipelines and other transportation 28 mechanisms that offer commercially reasonable rates for shippers and access for 29 shippers who produce natural gas, including propane and other hydrocarbons 30 associated with natural gas other than oil, in the state. 31 * Sec. 2. AS 31.25.005 is amended by adding a new subsection to read:
01 (b) The corporation may not plan or take any step to develop 02 (1) an in-state natural gas pipeline through which over 50 percent of 03 gas is intended for export by the corporation or another party as gas or liquefied 04 natural gas and that is described in (a)(4) of this section before the earliest of 05 (A) the date that the state or another party that holds natural gas 06 leases in the state withdraws from an Alaska liquefied natural gas project 07 described in (a)(5) of this section to which the state was a party on February 1, 08 2015; 09 (B) the date that the state and other parties enter into 10 contractual agreements to undertake front-end engineering and design for an 11 Alaska liquefied natural gas project described in (a)(5) of this section to which 12 the state was a party on February 1, 2015; or 13 (C) July 1, 2017; or 14 (2) an Alaska liquefied natural gas project described in (a)(5) of this 15 section other than a project to which the state was a party on February 1, 2015, before 16 the earliest of 17 (A) the date that the state or another party that holds natural gas 18 leases in the state withdraws from 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; 21 (B) the date that the state and other parties enter into 22 contractual agreements to undertake front-end engineering and design for an 23 Alaska liquefied natural gas project described in (a)(5) of this section to which 24 the state was a party on February 1, 2015; or 25 (C) July 1, 2017. 26 * Sec. 3. AS 31.25.080 is amended by adding a new subsection to read: 27 (h) The corporation may not market gas owned or controlled by an entity other 28 than itself without express written consent from that entity. 29 * Sec. 4. AS 31.25.100 is amended to read: 30 Sec. 31.25.100. In-state natural gas pipeline fund. The in-state natural gas 31 pipeline fund is established in the corporation and consists of money appropriated to
01 it. The corporation shall determine fund management and may contract with the 02 Department of Revenue for fund management. Unless otherwise provided by law, 03 money appropriated to the fund lapses into the general fund on the day this section is 04 repealed. Interest and other income received on money in the fund shall be separately 05 accounted for and may be appropriated to the fund. The corporation may use money 06 appropriated to the fund without further appropriation for the cost of managing the 07 fund and for the planning, financing, development, acquisition, maintenance, 08 construction, and operation of the in-state natural gas pipeline described in 09 AS 31.25.005(a)(4) [AS 31.25.005(4)] and for the purposes of AS 31.25.005(a)(4), 10 (6), and (7). The corporation may not expend money from the fund to plan or 11 take any step to develop an in-state natural gas pipeline through which over 50 12 percent of gas is intended for export by the corporation or another party as gas 13 or liquefied natural gas and that is described in AS 31.25.005(a)(4) before the 14 earliest of 15 (1) the date that the state or another party that holds natural gas 16 leases in the state withdraws from an Alaska liquefied natural gas project 17 described in AS 31.25.005(a)(5) to which the state was a party on February 1, 18 2015; 19 (2) the date that the state and other parties enter into contractual 20 agreements to undertake front-end engineering and design for an Alaska 21 liquefied natural gas project described in AS 31.25.005(a)(5) to which the state 22 was a party on February 1, 2015; or 23 (3) July 1, 2017 [IN AS 31.25.005(4), (6), AND (7)]. 24 * Sec. 5. AS 31.25.390(1) is amended to read: 25 (1) "Alaska liquefied natural gas project" means a natural gas project 26 as described in AS 31.25.005(a)(5) [AS 31.25.005(5)] that includes collectively, the 27 Prudhoe Bay unit gas transmission line, the Point Thomson unit gas transmission line, 28 a gas pipeline, the gas treatment plant, a liquefied natural gas plant, and a marine 29 terminal; in this paragraph, 30 (A) "gas pipeline" 31 (i) means the main natural gas pipeline from the outlet
01 flange of the gas treatment plant on the North Slope to the inlet flange 02 of the liquefied natural gas plant located in the Southcentral region of 03 the state, which shall have offtake points along the pipeline for 04 deliveries of gas in the state; 05 (ii) does not include any gas lines downstream of any 06 offtake point between the gas treatment plant and the liquefied natural 07 gas plant; 08 (B) "gas treatment plant" means those facilities and related 09 activities required to receive natural gas from the Prudhoe Bay unit gas 10 transmission line, the Point Thomson unit gas transmission line, and other 11 facilities, treat the natural gas to pipeline specifications, dispose of or deliver 12 by-products, deliver liquid products for further transportation, and deliver 13 treated natural gas for transportation through the gas pipeline; 14 (C) "liquefied natural gas plant" means the facility for 15 liquefying natural gas and includes structures, equipment, underlying land 16 rights, other associated systems, storage, and facilities for off-loading liquefied 17 natural gas; 18 (D) "marine terminal" means the terminal and those facilities 19 required to receive liquefied natural gas from the boundary of the liquefied 20 natural gas plant for marine transportation, including auxiliary vessels used in 21 the operation of the terminal; 22 (E) "Point Thomson unit gas transmission line" means a natural 23 gas transmission line from the outlet flange of the Point Thomson unit 24 production facility to the inlet flange of the gas treatment plant; and 25 (F) "Prudhoe Bay unit gas transmission line" means a natural 26 gas transmission line from the outlet flange of the Prudhoe Bay unit central gas 27 facility to the inlet flange of the gas treatment plant; 28 * Sec. 6. AS 31.25.390 is amended by adding a new paragraph to read: 29 (8) "front-end engineering and design" means a study that includes 30 (A) sufficiently detailed basic engineering packages for the 31 components of the Alaska liquefied natural gas project and a contracting
01 strategy to enable contractor bidding for the engineering, procurement, and 02 construction contracts; 03 (B) a resourcing, commissioning, and start-up plan; 04 (C) the finalization of the key project agreements required to 05 implement the Alaska liquefied natural gas project; 06 (D) a technical and commercial definition of the Alaska 07 liquefied natural gas project; 08 (E) a detailed update of the Alaska liquefied natural gas project 09 economics, financing, and commercial assumptions, including an updated 10 estimate of capital costs sufficient for a final investment decision; 11 (F) a final assessment of the environmental, social, and health 12 effects of the Alaska liquefied natural gas project; 13 (G) a description of long-lead procurement activities; 14 (H) a description of other activities necessary to enable a final 15 investment decision to be taken on the Alaska liquefied natural gas project, 16 including financing, permitting, and registration information; and 17 (I) the bidding and internal selection of engineering, 18 procurement, and construction contractors, if applicable. 19 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).