Alaska legislative committee approves amended gas pipeline bill

Juneau (Platts)--4Apr2007

An Alaska legislative committee approved on April 3 an amended version of
a bill sponsored by Governor Sarah Palin to solicit new proposals for a
natural gas pipeline.

The House Oil and Gas Committee voted to send the bill to the House
Resources Committee for further work. A state senate committee voted out its
version of the bill April 1.

The House committee amended House Bill 177 to narrow criteria used by
state officials to select a winning pipeline proposal to one that offers the
highest value to the state in terms of net present value and one that has the
best chance for project sustainability.

Factors like financial capability and experience with similar projects
will be considered in judging the likelihood of success, state Revenue
Commissioner Pat Galvin told Platts.

A proposal to require a pipeline applicant to offer 5% of equity in the
project to the Alaska Permanent Fund, a state investment fund, was defeated on
a 5-2 vote in the House Oil and Gas Committee.

The Senate Resources Committee changed its version of the bill April 1 to
make acceptance of a $500 million state grant for a bid a variable in the
selection rather than a requirement for all applicants.

Palin's proposal would have Alaska solicit proposals for a gas pipeline
that meets certain goals such as required periodic open seasons and rolled-in
tariffs on pipeline expansions.

If the legislature passes the bill this spring, the governor aims to have
requests for applications out by July, proposals for the project in by October
and a winning project selected by January.

Under the current version of the bill, the legislature will approve the
winning contract.

--Tim Bradner, newsdesk@platts.com