Alaska Gasline Development Corp. leaders are asking the state's development bank for help in financing the Alaska LNG project, but neither side is willing to say as much.
Multiple sources within the state confirmed AGDC has applied for a loan from the Alaska Industrial Development and Export Authority to fund work on the $43 billion LNG export plan. But when asked if the state-owned gas line corporation had sought help from its fellow state-owned financing authority, an AGDC spokesman provided neither a "yes" or a "no."
"AGDC is actively developing financial and business arrangements that are beneficial to moving the Alaska LNG Project forward," spokesman Jesse Carlstrom wrote in an email. "Due to the confidentiality and competitive nature of these efforts, AGDC cannot publicly disclose any information at this time."
The agenda for the May 31 AIDEA board of directors meeting listed an "LNG loan" as one of the topics the seven-member board would be discussing in an executive session. AIDEA spokesman Karsten Rodvik said the authority had received a loan application to finance an LNG project and authority staff was in the early stages of reviewing the application.
"It was just a quick briefing and heads up on a loan that could come before them (for approval) someday," Rodvik said.
He added that it was discussed behind closed doors because of a confidentiality statute that precludes disclosing potentially sensitive information of the authority's prospective business partners.
It is common practice for public bodies to discuss legal, business or personnel matters in an executive session to prevent information that could potentially damage a business deal, for instance, if it became public, but the general topics that are going to be discussed in an executive session must be disclosed.
However, in the case of AIDEA and AGDC, both are public entities under the Department of Commerce, Community and Economic Development and their financials are public information.
AIDEA officials denied a June 1 records request for the documents related to the "LNG loan," citing the authority's confidentiality statute, but noted the documents would be made public if the board ever took action on the application.
Subsequent records requests submitted June 4 to AIDEA and AGDC seeking documents sent between the two this year are outstanding.
The amount AGDC is requesting and under what loan structure is unknown at this point. AIDEA regularly participates with private banks and credit unions in loans for real estate developments.
The authority has several loan programs and also invests in energy projects but it is typically required to — unless directed via legislative policy — to achieve commercial returns on its investments, which also often require significant collateral.
AIDEA had a net position of more than $1.3 billion at the end of fiscal year 2017, according to its annual report.
And while AGDC leaders have made good on their promise over the last two years to not request additional funding from the Legislature while the state continues to run sizable deficits, legislators further challenged them by not granting the agency the ability to accept third-party investments in Alaska LNG in the state budget passed May 12.
Enough legislators are concerned that authorizing AGDC to accept outside funds would ostensibly be signing away the Legislature's control over the project — that of the pursestring — that the request was pulled from the budget.
The corporation took over control of the project in January 2017 with $106 million remaining from prior gas line appropriations and expects to have $52.5 million at the start of the 2019 fiscal year July 1.
An austerity program instituted by AGDC leaders when they took over the project has helped them under-spend on their budget by $35.7 million since. As a result, the corporation should be able to continue operating on its existing funds through June 2019, according to AGDC Finance Manager Philip Sullivan.
However, lacking a substantial injection of new money could potentially challenge the ability of the corporation to stay on its desired schedule, which is to have a final investment decision in early 2020.
Prior to that AGDC will need to hire at least one, likely multiple, large engineering, procurement and construction firms to manage the massive build-out as well as complete the costly environmental impact statement for the project that is currently being reviewed by the Federal Energy Regulatory Commission.
Elwood Brehmer can be reached at email@example.com.