Gas authority appeals for funds

Posted: Tuesday, September 09, 2003

JUNEAU (AP) The head of the Alaska Natural Gas Development Authority will ask lawmakers for $3 million to push ahead with work on a state-owned gas pipeline and liquefied natural gas facility.

Harold Heinze, chief executive officer for the authority, said the state needs to take action before the Legislature returns in January.

The authority, which was created by voter initiative last November, is seeking money to complete cost estimates and a marketing plan for a pipeline from the North Slope to Valdez.

Already, the Murkowski administration has said it is in no rush to find the money. But Heinze plans to appeal to separate House and Senate committees meeting in the interim.

Heinze plans to testify before the Senate Resources Committee when it meets in Anchorage on Wednesday. The House Finance Committee will meet Thursday.

Before the billion dollar pipe-line is even constructed, the authority has said it has a potential customer for the natural gas.

Sempra Energy of San Diego is working with the Mexican government to construct a liquefied natural gas terminal in Baja California.

The firm is talking to Alaska as a possible supplier and would require a billion cubic feet of gas per day. Heinze has said the Sempra project would provide Alaska marketers with strong opportunities.

''We have to work in a timely fashion'' if Alaska is going to convince buyers that it can deliver liquefied natural gas to proposed U.S. West Coast terminals by the time of their expected openings starting in 2007-08, Heinze told the Petroleum News.

The authority voted recently to request up to $3 million in additional state funding immediately to prepare estimates for the project.

If the project is feasible, the authority would ask lawmakers and the Murkowski administration for between $100 million and $200 million for design work, Heinze said.

The Murkowski administration said Heinze's request is moot until lawmakers return in January.

''The general fund money is not available because the process does not allow it to be available,'' said Steve Porter, deputy commissioner for the state Department of Revenue.

But if a majority of the Legislature supports the request, Heinze may seek other funding alternatives such as loans, he said.

The authority can issue bonds and accept loans from state, federal or private funding sources. But the state is not responsible for its debt.

''If there is a body of will out there to do this, we can find the money,'' Heinze said.

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