AGDC managers ask board for $1.28 million to support its 25% stake in Alaska LNG

Alaska Gasline Development Corporation management asked the corporation's board Tuesday to approve $1.28 million to manage its 25% stake in the Alaska LNG project this fiscal year, which runs through June 30, 2027. As of Thursday, AGDC had not posted the board's decision.

The money would pay for embedded contract staff and outside legal help: $751,000 for commercial management, including $300,000 for legal support, and $527,000 for program management, according to the FY27 authorization for expenditure. It does not cover AGDC's corporate operations, which the board approved separately. The request is about $316,000 below the previous year's original $1.59 million budget, most of which went to program management. AGDC reported $211,000 in unaudited capital spending this fiscal year through Aug. 31, including $112,000 for program management and $103,000 for commercial management.

AGDC once owned all of Alaska LNG. Glenfarne now owns 75% of 8 Star Alaska, the subsidiary that holds the project, and leads development, while AGDC keeps 25%. AGDC has two members on the project's Development Consultation Committee, according to the October president's report. Its role "has shifted from 100% ownership rights of the Alaska LNG project to 25% minority owner," AGDC President Frank Richards told the Senate Finance Committee on June 4.

One of AGDC's objectives listed in the authorization is to "maintain technical and commercial management capacity to execute potential clawback of 8 Star and Alaska LNG, if necessary." The program management staff it would fund are to focus partly on "clawback management."

The authorization also says AGDC is preparing for its option to invest 5% to 25% in 8 Star's sub-projects, such as the pipeline, as each reaches a final investment decision. Alaska News reported June 4 that the state would have 180 days after that decision to buy in.

The president's report said Glenfarne has signed gas sales precedent agreements for Phase 1 pipeline gas with Pantheon Resources, ExxonMobil and Hilcorp, and letters of intent with Enstar, Chugach Electric and Donlin Gold. It also said the lack of legislative relief on property taxes will delay the project's schedule and add costs.