The state of Alaska completed the buyout of TransCanada’s share of the Alaska LNG Project Tuesday.
Kenai Peninsula Borough Special Oil and Gas Assistant Larry Persily says the action doesn’t change the project schedule or cost.
Persily: “It means that instead of just owning 25% of the LNG plant and marine terminal in Nikiski, the state now has a 25% stake in the entire project from the North Slope down to Nikiski. That means the state will have to put up more money during project development instead of sharing that cost with TransCanada and then if all works out we’ll make more money at the end.”
Consultants of the Department of Natural Resources found that terminating the relationship with TransCanada will increase State revenue from the Project by up to $400 million annually when gas starts flowing.
The Alaska Legislature passed the bill for the buyout during their third special session that started in October, appropriating $68.5 million for the deal and requesting another $76 million to fund the State’s continued participation.
Persily: “That covers paying back TransCanada for its expenses to date on the project and it cover the state’s share of development costs through then end of the fiscal year, June 30, 2016. The legislature will need another appropriation in the 2016 session to cover the state’s share of development costs for fiscal 2017.”
As of today, DNR has paid the termination amount of $64,590,000 and TransCanada has transferred its participation interests to the Alaska Gasline Development Corporation.