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Pipeline consortium elects new leader

Posted: Thursday, November 16, 2000

FAIRBANKS (AP) -- The mayor of the North Slope Borough has been named the new chairman of the municipal consortium that's pursuing a natural gas pipeline.

Mayor George Ahmaogak succeeds former Fairbanks North Star Borough Mayor Hank Hove.

Ahmaogak said he hopes to accelerate promotion of the Alaska Gasline Port Authority.

''Alaskans have been waiting for a gas line project for years, and I think the day is near when this dream will become a reality,'' Ahmaogak told the Fairbanks Daily News-Miner. ''When it does, it will be in the best interest of all Alaskans to have the port authority involved.''

Hove no longer is on the board. He moved to Nevada when his term as Fairbanks North Start Borough mayor ended in October. The new mayor of the Fairbanks borough, Rhonda Boyles, has taken a seat on the panel.

Voters at Valdez, Fairbanks and the North Slope created the port authority last fall to sponsor pipeline development. The public consortium would own the gas line and contract work out to private companies. It hopes to gain an agreement with gas producers.

The port authority is promising community dividends to assure an annual revenue spinoff to Alaska municipalities.

A limited budget may determine just how much promoting the port authority board will be able to do. The port authority's three member communities each contributed $100,000 to the project. Yukon Pacific Inc. and Bechtel Corp. also donated money.

The bulk of the port authority's expenses are for legal fees generated by the New York City law firm of O'Melveny and Myers. Those fees, over $1 million, will not have to be paid unless the project becomes a reality.

But the port authority also has some out-of-pocket expenses, like travel and teleconferencing.

''We do not have a surfeit of currently available funds,'' said Fairbanks attorney Charlie Cole, who was named last week as vice chairman of the port authority board.

The coffers of the port authority may not be bulging, but board members believe the concept has a lot to offer.

During its annual meeting last week, the board sent a letter to Alaska's major gas producers -- BP, Phillips Petroleum Co. and Exxon Mobil -- reiterating the economic benefits of its vision.

Those benefits would include an estimated $3 billion to $6 billion in federal income tax exemptions resulting from a public entity owning the line, and an exclusion from costly federal regulations.

The letter also emphasized that the port authority no longer is pushing only a gas line to Valdez for liquefaction and export to Asia.

The authority now is promoting a two-legged line that would include both the Valdez spur and a pipeline following the Alaska Highway industrial corridor to markets in the Lower 48.

The letter to the gas companies said the port authority will support any gas line route that follows the existing trans-Alaska oil pipeline to Fairbanks and down the Alaska Highway or that goes to Southcentral Alaska for export.

''This commitment includes making the port authority structure available to a Lower 48 project down through Alaska,'' the letter said. ''It also includes making the port authority structure available to a pipeline to Valdez, Nikiski or any other port that may be economic and politically viable.''



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