State corporation sets December deadline to find customers for Alaska’s gas

Sen. Natasha Von Imhof, R-Anchorage, questions representatives from the Alaska Gasline Development Corporation during a Senate Finance meeting focusing on the corporation’s budget on Tuesday, February 14, 2017, in Juneau, Alaska. (Photo by Rashah McChesney/Alaska’s Energy Desk)

The Alaska Gasline Development Corporation has another deadline looming.

Listen now

Board Chairman Dave Cruz told lawmakers in Anchorage told lawmakers in Anchorage on Monday that the corporation’s board is operating under a December 31, 2017 deadline to find a customer for Alaska’s natural gas.

It has been ten months since the state took the lead on the mega-project that would transport natural gas from Prudhoe Bay to Cook Inlet, then ship it to buyers in Asia.

Members of finance and resources committee in both the state House and Senate met to hear a quarterly report on the progress of the project. Corporation President Keith Meyer was not at the meeting, Board Chairman Dave Cruz said he is in Asia marketing the state’s gas.

So, Cruz started the meeting. And he began by asking lawmakers to consider the impact that their discussions with members of the media can have on the corporation’s efforts to market the project.

Alaska Gasline Development Corporation President Keith Meyer, Alaska Gov. Bill Walker and Department of Natural Resources Commissioner Andy Mack discuss meetings with potential buyers of Alaska’s LNG during a press conference on Friday Sept. 30, 2016 in Anchorage, Alaska. (Photo by Rashah McChesney)

“The world is watching us. This is not just some little project in Alaska that the world doesn’t know about,” Cruz said.  “And every local news story that is picked up by our industry and world press it places a great challenge on our team when they have to first defend the project against the negative comments before being able to sell it on its merits.”

For the next hour, lawmakers peppered Cruz and other members of the corporation’s executive board with questions about project finances, employee turnover and how much money the state expects to make on its share of the project.

Sen. Natasha Von Imhof, R-Anchorage, and Sen. Anna MacKinnon, R-Eagle River, both accused employees of evading questions on the project’s finances.

Von Imhof said she met with employees at the corporation last week and they “danced around her questions,” on how fast the corporation is burning through the roughly $102 million it has budgeted to spend on building a gasline project. She said she spent the weekend digging through documents and determined that it has about $70 million left to spend.

That is a fraction of the roughly $45 billion needed for the project to be built. Richards said the corporation is currently spending about $3 million a month, though the board has authorized it to spend more than $6 million monthly.

Lawmakers also asked about deadlines. Last year, Gov. Bill Walker gave the project until September, 2017 to generate enough activity to justify continuing to spend millions on the project.

The state corporation held an open-season asking potential customers and investors to show formal interest. And while it did not result in any firm commitments, Walker said he is encouraged by how well the state has engaged with potential buyers .

But, Walker stopped short of saying the state should put more money into the project.

When lawmakers asked Richards if the corporation plans to come to the legislature for more money during the next session — he said it all depends on whether it finds a customer.

Editor’s note: A previous version of this story, mistakenly attributed the Alaska Gasline Development Corporation’s self-imposed deadline for finding a customer. Board Chairman Dave Cruz shared that internal deadline with lawmakers.  

Rashah McChesney is a photojournalist turned radio journalist who has been telling stories in Alaska since 2012. Before joining Alaska's Energy Desk, she worked at Kenai's Peninsula Clarion and the Juneau bureau of the Associated Press. She is a graduate of Iowa State University's Greenlee Journalism School and has worked in public television, newspapers and now radio, all in the quest to become the Swiss Army knife of storytellers.

Previous article“Part Land, Part Water – Always Native”: 34th Annual Elders and Youth Conference kicks off
Next article2013 Dalton Highway fuel spill clean-up concludes