Alaska’s quest to build a gas pipeline from the North Slope to its southern shore needs additional cash from the state treasury, the president of the state-owned Alaska Gasline Development Corp. said last week.
In a pair of hearings at the state Capitol, corporation President Frank Richards asked state lawmakers for $3.1 million in funding.
Without the money, he said, the corporation will shut down.
“If the budget does not include this, then yes, we will move out of their offices and we will be laying off our people and putting our projects in boxes,” Richards told the House Finance Committee.
The money is in the budget proposed by the House but is not yet in the one proposed by the Senate.
Sen. Bert Stedman, R-Sitka, said on Friday that the corporation will get its money, and there are no plans to defund the agency.
Since its inception in fiscal year 2014, the AKLNG fund — short for Alaska Liquefied Natural Gas, and the usual source of operating money for the corporation — has received $242.8 million from the state, said Alexei Painter, director of the Legislative Finance Division, a nonpartisan office that analyzes the state budget.
When the current budget year ends on June 30, the fund will be down to $1.5 million.
Richards said the corporation intends to use the remaining money to partially match a $4 million federal grant garnered by Sen. Lisa Murkowski, R-Alaska.
In addition to the $3.1 million needed to keep the corporation operating for another year, Richards requested another $2.5 million to complete the match requirements.
Lawmakers said last week that they were inclined to approve that money as well.
Richards, providing an update on the gas pipeline project, said AGDC is working with Goldman Sachs to find a buyer for 75% of the state-owned project, with the corporation keeping the remaining quarter.
With global natural gas supplies disrupted by the Russian invasion of Ukraine, AGDC has advertised the Alaska project as a reliable alternative to Russian gas.
In exchange for 75% of the project and the predevelopment work that has already been done, the buyer would be expected to provide the $150 million needed to advance the project to the last step before construction.
Construction of the pipeline itself is expected to cost $44 billion, Richards said, and the $150 million would cover front-end engineering and design, the last permits, and other work.
“I look forward to bringing you exciting news regarding securing investors before the start of the next legislative session,” Richards said in a letter to the Senate Finance Committee on Wednesday.
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