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Work Commitments - What is in the Deal that actually gets us a pipeline? Alaska

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  • Work Commitments - What is in the Deal that actually gets us a pipeline? Alaska

    The contract lays out the specific financial and related terms for a gas pipeline to which both the state and the producers agree.

    The contract requires the state and producers to diligently and prudently advance a "Qualified Project Plan" until the producers sanction the project. The first steps, often intensive engineering and fixed work, will involve preparing for the open season required by the Federal Energy Regulatory Commission (USA) and the National Energy Board (Canada) as part of the application process to obtain a certificate of public need and convenience.

    The contract will terminate through an arbitration process if either producers or the state fail to diligently pursue the qualified project plan.

    As Dr. Pedro van Meurs, international oil and gas consultant said at a news conference last October, "Work commitments in this contract are not just a little bit better, they are significantly better than anything of any long distance project in the world."

    The contract allows the producers to include the value of the gas on their financial books - a big motivation to vigorously pursue the project.
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