Alaska Gov. Sarah Palin last Tuesday took the next step in implementing her Alaska Gasline Inducement Act (AGIA) by issuing a request for applications from companies for an exclusive license to build a $30 billion-plus pipeline to bring Alaska North Slope natural gas to market.

Applicants have until Oct. 1 to submit proposals, after which the commissioners of the state’s Departments of Natural Resources and Revenue will review the proposals to determine which meet the requirements of the AGIA. The applications will be released to the public for a 60-day review and comment period.

The state will select the application that promises the most economic benefit to Alaska, and the greatest likelihood of resulting in a completed natural gas pipeline, the governor’s office said. The commissioners will forward the recommended licensee to the Legislature, which will then have 60 days to pass a bill approving the commissioners’ decision. Assuming everything goes as planned, approval of the winning proposal would fall to the Legislature in its 2008 session.

“I look forward to receiving complete applications so we can select a licensee, roll up our sleeves, and get to work building a gas pipeline that will, at last, send our North Slope gas to Alaska’s homes, to our businesses and to the nation,” Palin said.

The request for applications can be downloaded directly from the AGIA documents website at https://www.dog.dnr.state.ak.us/agia/index.htm.

The AGIA offers inducements to those that will build the pipeline itself, whether it turns out to be Alaska’s three major North Slope oil producers (ExxonMobil, ConocoPhillips and BP), an independent pipeline company, a state or quasi-state entity, or a combination of entities joining forces. To get a chance to compete for the inducement package, the applicant must agree to certain bedrock, “must-have” requirements of the state, such as gas for Alaskans, jobs for Alaskans and project benchmarks. AGIA requires terms that ensure competitive and long-term exploration and more development on the North Slope. The act also provides inducements to those who hold the leases and control the gas.

BP, ConocoPhillips and Exxon Mobil have said they will not submit pipeline proposals under Palin’s AGIA, and BP has said it would not sign take-or-pay contracts with a pipeline licensed under AGIA. TransCanada Corp. and MidAmerican Energy both have said they might submit proposals, but TransCanada has said provisions in the AGIA might prevent it from bidding. Enbridge Inc. is on record as expressing interest in a pipeline project but not willing to go it alone, preferring to be part of a consortium (see NGI, May 21).

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