The Alaska Gasline Inducement Act (AGIA), passed by the Legislature in 2007, put in place a licensing agreement with TransCanada that envisioned construction of a large-diameter gas pipeline from the North Slope to Canada or Valdez, or perhaps both, depending on what markets potential gas shippers might be focusing on.
AGIA includes a provision that the state reimburse TransCanada for up to $500 million that it spends on pre-construction work and to prepare an application with the Federal Energy Regulatory Commission, due in 2012.
Much of the political debate at the time was over Exxon's role in the project, primarily because Exxon is the major natural gas producer on the North Slope. Concerns were raised over whether it was fair that the state pay Exxon to do what it would do anyway - produce and sell natural gas into a pipeline.
Exxon has never signed on to the license agreement between TransCanada and the state, but within days after the agreement was finalized TransCanada officials made it clear that Exxon was a vital partner in the project.
According to testimony before the Alaska Legislature earlier this month, as of the end of June, the state will either have paid or will owe TransCanada about $125 million. Gov. Sean Parnell has asked for another $160 million for fiscal year 2012, which begins July 1.
TransCanada spokesman Shawn Howard said that TransCanada, as the AGIA licensee, seeks the reimbursement and then receives it from the state. The company then "shares the reimbursement with Exxon Mobil," he said.
Howard said TransCanada won’t reveal how much state money it has passed on to Exxon, citing confidentiality agreements.