AGDC faces questions from House Resources on Glenfarne selection
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Kristen Nelson
The Alaska Gasline Development Corp. got a lot of questions on April 9 when it presented an update to the House Resources Committee. There didn't appear to be opposition to the project, but rather a desire to understand where the project is and how it got there.
On the agenda were AGDC's agreement with Glenfarne to move ahead with front-end engineering and design, FEED, on the Alaska liquefied natural gas project. Glenfarne is taking the lead -- and a 75% interest in 8 Star Alaska, the AGDC subsidiary formed to hold the corporation's assets. The goal, the committee was told, was to complete FEED and reach a final investment decision, FID, for the entire project -- carbon capture plant on the North Slope, 807-mile pipeline and LNG plant at Nikiski -- possibly as soon as the end of the year.
The immediate goal is Phase 1 of the project, the pipeline, and moving natural gas to Cook Inlet to meet the impending natural gas shortage in Southcentral.
AGDC President Frank Richards and Matt Kissinger, AGDC's venture development manager, led the presentation, with AGDC Board Vice Chair Janet Weiss available for committee questions.
Among the lines of questioning, there was considerable interest in timing.
Kissinger said in response to a question from Rep. Donna Mears, D-Anchorage, that the next major milestone is FEED entry on the pipeline, with news of that expected this month. Asked if the information expected to come in April would include a FID date, Kissinger said he was uncertain if a target FID date would be included because of timing uncertainty around financing and equity investments, but said he expected milestones to be included with the announcement, and information on the pipeline consortium coming together, and concurrent with that, or shortly after, details around FEED entry.
Confidentiality, approvals Confidentiality was an issue for some committee members, who asked about access to agreements AGDC signed with Glenfarne.
Rep. Zack Fields, D-Anchorage, asked if AGDC could provide unredacted versions of the agreements it signed with Glenfarne. He also asked if Glenfarne committed to a timeframe and asked what the terms were of those timeframes.
Richards said the agreements were confidential.
Fields asked if AGDC's board members had reviewed the documents before signing off on the deal.
Weiss said the board was provided the full agreements, along with explanations and time to review the agreements.
Asked if the board had the opportunity to review other proposals and compare benefits to the state she said the board saw the types of companies, the actual companies which came forward, their ability to do such a project and screening criteria.
Fields pursued the question later in the hearing, asking Weiss if she was aware that Richards told other companies not to continue providing information, and wanted to know if other companies screened by Goldman Sachs were eliminated from consideration.
A big part of what Goldman Sachs did for AGDC, Weiss said, was to identify whether a company had the wherewithal to fund the $150 million estimated to take the project to FID. Some companies were screened out on that basis. As to Richards telling companies to stop reaching out, Weiss said it was her belief that she had seen the activity and heard from AGDC on companies that came forward.
Rep. Julie Coulombe, R-Anchorage, asked if members could see the agreements AGDC signed with Glenfarne if they signed non-disclosure agreements; Richards said he would consider that in consultation with AGDC's legal counsel. She asked if AGDC had met the requirements that it consult with the commissioners of the departments of Natural Resources and Revenue on the proposal.
Richards said AGDC consulted with the commissioners in conjunction with the Attorney General's office.
Coulombe also asked about late proposals received by AGDC and Kissinger said he'd correct what he said earlier from proposals to engagement.
There was late engagement, he said, but AGDC started working with Glenfarne in March of 2024 and in June of 2024 entered into exclusivity with them, carving out a contingency to carry on with the Phase 1 pipeline if negotiations with Glenfarne failed to bear fruit.
Kissinger said AGDC was ethically obligated to carry out negotiations with Glenfarne in good faith, and by October and November the two were trading a term sheet back and forth -- a term sheet in line, he said, with everything AGDC had asked for.
Acting in good faith, AGDC in December closed the last bit of exclusivity around Phase 1 so it could conduct the final bit of due diligence.
Coulombe asked if the process was competitive, and Kissinger said it was a years long process. Companies weren't banging on AGDC's doors, he said, we were banging on theirs.
When AGDC got traction with Glenfarne there wasn't anybody else at the time. A couple of companies were looking but not to the extent Glenfarne was and those other companies weren't doing due diligence, an indicator, he said, of whether a company is really interested.
Rep. Dan Saddler, R-Eagle River, said he didn't know if anyone was being shut out but didn't want to second guess work AGDC has done.
He said the questions the committee was asking were questions the public was asking.
As the committee concluded the meeting, Resources Co-Chair Rep. Robyn Burke, D-Utqiaġvik, said there were a lot of questions and formally invited AGDC to come back before the committee, along with the DNR and Revenue commissioners and possibly Goldman Sachs.
--KRISTEN NELSON
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