Royalty gas bill put on shelf for a year

PHOTO/Lisa Seifert/For the Journal
The Alaska Department of Natural Resources has decided to put on hold until 2003 its efforts to get state lawmakers to allow the sale of royalty gas from the North Slope.

Royalty gas is the share of total gas production owned by the state. Although the state often receives cash from oil and gas lessees for its royalty share, it has the option of taking its royalty in-kind and selling it.

DNR plans to complete the preliminary process of approving the Anadarko-Alberta Energy contract, but will postpone presenting it to the Legislature this year because Alaska lawmakers may not have enough time to adequately consider the sale, DNR Commissioner Pat Pourchot told members of the Resources Development Council April 4.

"I see this contract and the documentation that will accompany it as a model for this royalty gas sale and future sales," Pourchot told the Alaska Oil & Gas Reporter after the breakfast meeting.

He said DNR also opted to postpone taking the royalty-sale contract to the Legislature this year because of the potential impact of federal gas legislation on the measure. A gas pipeline bill is being debated this spring in Congress.

State regulators selected the Anadarko-Alberta Energy bid from four offers because it met all of Alaska’s requirements for a royalty gas purchase. It also would generate $252 million more than the market value of the gas over 25 years, Pourchot said. The other bidders were Chevron Co. USA, Williams Alaska Petroleum Inc., and Alaska Power and Telephone of Tok.

04/14/2002 - 8:00pm