The Alaska Gasline Inducement Act (AGIA) was passed by the state's House and Senate finance committees with relatively minor changes late Thursday, and Gov. Sarah Palin said she was optimistic the bill would pass the Legislature with most of the original language intact. Floor votes on both bills were expected on Friday.

Palin's legislation, which was unveiled earlier this year, sets the framework for what incentives would be offered to potential pipeline builders in exchange for their commitment to move Alaska's gas to market (see Daily GPI, March 5). The bill includes midstream incentives, including a $500,000 matching contribution by the state, to encourage companies to identify benchmarks and build the pipe.

Palin has threatened to veto any pipeline bill that does not include her requirements.

Palin told the Anchorage Daily News, "Thus far, the bill hasn't been gutted, which is good. If we didn't have the must-haves in there, we would have to start over, because then Alaska wouldn't be getting what it deserves." Palin said her bill was the first to set parameters "to create a legitimate way to commercializing Alaska's natural gas. It's fair to the producers to know what the rules are. That way, political pressure cannot play a part in judging the proposals if everyone knows the rules."

Meanwhile, BP is "extremely disappointed with where we are at right now in Alaska," Lee Lunde, senior vice president of BP Canada Energy, said Thursday in response to a question at GasMart 2007 in Chicago (see Daily GPI, May 11).

"In spite of our attempts to show that [the current] legislation will not result in a successful project, our sense is that it is going to go ahead. I can't say at this point there is any good news. It is a never-ending story." Producers have been urging lawmakers to make changes to make the project economic (see Daily GPI, May 7).

In a presentation at GasMart about supply options, Lunde said that for the longer term there is "at least 6 Bcf/d of gas that can flow each and every day to the North American market" from the two proposed northern pipeline projects, the Alaska line and the proposed Mackenzie pipeline in Canada. "That is an absolutely vital part of the equation going forward."

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