TransCanada's Keystone XL:

Australian Investor Speaks!


Our Northern Gas Pipeline (NGP) friends will want to tune in today to Alaska legislative video conferences dealing with

1) AIDEA financing of an Interior Energy Project (10:15 ADT), and

2) Hilcorp discussing Cook Inlet gas/North Slope projects and operations (12 Noon, ADT)  

…  

Letter from a reader: Dave:  Thank you very much for having provided the opportunity to present to the public the example of injustice that the Orange Hill Taking exposes.  Your description of the “War On Alaska’s Future” is excellent.    More here (2-24-15)….


Yesterday, we opined that, We  continue to wish Alaska's new governor well, but hope there's not a screw loose somewhere….

Today we decided to further refine the story and that will take us another day.  
 
In preparing to critique it, we urge our gentle readers to review yesterday's references and to those we add two more today:
 
1.  Please review our earlier commentary, "It's Our Oil And We Are Sovereign, By Golly!"
 
2.  One of our most astute readers is a natural resource investor from Down Under–not associated with the large Alaskan producing companies.  
 
Being a private, individual investor interested in Alaska and being a firm believer in "due diligence" he has rigorously analyzed Alaska as an "investment climate" for several years.  
Last night, our friend penned his own commentary (right hand column) which we  appreciate his having shared with us.
 
His unsolicited, personal views may reflect a number of sophisticated investor views everywhere.
 
We hope that by honestly and publicly discussing these matters Alaska's new governor may yet become successful and and that the state can avoid any critical, politically caused, train wrecks.  -d

A commentary written by our Australian investor friend to his friends and colleagues in Alaska (Please read in conjunction with our 3-1-12 commentary):

Dave,

I was minded to put fingers-to-keyboard by your Governor’s recent comments on the Alaska LNG and Alaska Gasline Development Corporation projects (AKLNG and AGDC, Aka., ASAP).

They sounded very much like one hears all the time in developing nations: “We are the owners, blah, blah, blah."

Of course, he misses the point here: the State is the freehold owner but it has leased its rights to extract to others on a long term basis, sufficient for those others to book reserves and contingent resources in connection with those extraction rights.

In developing nations it is often easy to understand the motivations of the political leaders who say such things.

Their statements are usually a combination of not being well educated in international commercial and legal matters (and who can blame them) and because they see an opportunity to personally profit from a State’s resources.

I would strongly presume neither motivation applies to Walker, who no doubt is merely (i.e. in his own mind) undertaking a minor political tactical play in connection with appointees to AGDC, etc.

However, does he not realize that LNG projects compete on a global basis and although AKLNG has leapt up the league tables over the last 18 months, its chances of achieving FID are reduced by playing petty politics?   (See our commentary on LNG global competition: 1, 2, 3 -dh).

It is of course a complete joke to think that the State of Alaska could by itself somehow “procure” (expropriate?) gas from the Producers and then sole fund, build and market its own LNG project. That's the sort of thing the Government of Mozambique might say. 

Anyway, I expect the Producers to just sigh and get on with things – with however another minor reservation in the back of their minds.

Cheers,

(Signed by our Australian friend….)