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TransCanada not seeking AGIA changes

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Posted: Friday, October 5, 2012 12:49 pm

JUNEAU, Alaska - TransCanada Corp. has no immediate plans to ask the state of Alaska for additional funding to advance a major gas line project, an executive with the company said Friday.

Under the Alaska Gasline Inducement Act, or AGIA, TransCanada is eligible for up to $500 million in reimbursable costs for its work. Reimbursement to date is about $200 million, according to a spokesman for the Alaska gas pipeline office.

TransCanada, which holds an exclusive license with the state to advance a line, had focused much of its attention on a line that would run from the North Slope into Canada to serve North American markets. But the company has shifted attention recently to a line that would run through Alaska to tidewater, as part of a project that would allow for liquefied natural gas exports overseas, in connection with the North Slope's three major players.

When asked if TransCanada would seek additional funding for its work from the state, Tony Palmer, vice president for major projects development for the company, said TransCanada is not seeking changes to AGIA at this point.

He repeated that line when pressed on the funding question.

Two of the North Slope producers, BP and ConocoPhillips, have expressed concerns with AGIA. Those issues helped give rise to the two companies pursuing a rival project to the one being pursued by TransCanada and Exxon Mobil Corp., the North Slope's other major player, before those projects folded last year due to lack of market support.

Earlier this year, all four companies decided to come together - at Gov. Sean Parnell's urging - to look at a liquefied natural gas project that would be capable of exports to the Pacific Rim.

In a letter to Parnell this week, the companies listed issues with AGIA as needing to be resolved as part of a project moving forward. But it didn't define those.

Dawn Patience, a spokeswoman for BP in Alaska, said legislative changes to AGIA "will be required before BP will consider becoming subject to the terms of AGIA. The producers will assess what specific changes are required as the joint work effort progresses."

The four companies have estimated that a project could cost from $45 billion to $65 billion or more and would require such factors as predictable, "competitive" oil taxes from the state and "durable" fiscal terms for the LNG project. The companies were not more precise in defining those conditions.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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