Alaska State Legislature

News From The House Majority

Ken Freeman, Press Secretary
State Capitol
Juneau, AK 99801
phone: (907) 465-3804
web site: http://www.akrepublicans.org
Actuality line: 1-800-478-6540

Measure Seeks to Encourage Gas Pipeline

For Immediate Release: May 2, 1997 Contact: Rep. Mark Hodgins (907) 465-3779

JUNEAU - The Alaska State House Friday passed legislation that seeks to create significant opportunity for establishing a sound economic base for Alaska's future as well as providing for thousands of Alaskan jobs through development of the Trans-Alaska Gas line.

HB 250, which calls for the creation of a North Slope Gas Commercialization Team to work with the potential project sponsors to identify and develop a fiscal regime which will assist in making the Trans-Alaska Gas Line project a reality.

To date, the development of North Slope natural gas resources has been impeded because it was not economically feasible or competitive on the world market. North Slope leaseholders estimate a $15 billion cost for the construction of facilities associated with the development of these resources.

The State of Alaska recently commissioned a report, by Dr. Pedro Van Meurs, on the economic viability of the Trans-Alaska Gas Line. Dr. Van Meurs found that the project, would need some state and federal fiscal adjustments in order to stimulate the project investment structure. The North Slope Gas

Commercialization Team is tasked with identifying a fiscal platform which would enhance the economics of the project with regards to taxation and royalties.

Rep. Mark Hodgins, Chairman of the House Oil & Gas Committee, has been carrying HB 250. Hodgins said that the House Oil & Gas Committee has been conducting hearings throughout this session regarding the Trans-Alaska Gas Line and will continue to act as a facilitator between the Gas Line sponsors, the leaseholders, and the State of Alaska. The Commercialization Team will take the necessary next step in establishing a positive fiscal structure from which the project sponsors can build an economically viable project.

"We have heard, repeatedly, that the Asian market window for natural gas sales will begin around 2005. The Asian market is eager to purchase north slope gas and Alaska must proceed immediately with the gas project if we are to participate in this market window. Fierce competition among suppliers is expected from foreign gas projects and therefore Alaska needs to offer a coordinated proposal at a competitive price," said Hodgins.

Rep. Hodgins noted that given the short time frame for establishing an economically viable project, it is important to begin the formation of a fiscal platform as soon as possible.

"By coordinating our efforts we will shorten the timetable needed to bring this project on line and thereby increase Alaska's ability to establish a place in the competitive LNG market," said Hodgins.

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