Current through August 30, 2024
(a)
Unless otherwise provided in this chapter, a lessee calculating the monthly
value of the state's royalty share of qualified gas under this chapter shall
allocate gas and costs at and downstream of the inlet to the Alaska mainline as
provided in this section.
(b) Based
on its characteristics at destination, as destination is determined under this
section and
11 AAC 25.100(b),
qualified gas shall be characterized as one of the following:
(1) unprocessed gas;
(2) residue gas;
(3) one of the following gas plant products:
(A) NGL mix;
(B) fractionated gas plant
products.
(c)
If the lessee or its affiliate delivers into the Alaska mainline or a pipeline
downstream of the inlet to the Alaska mainline both qualified gas from a lease
and non-qualified gas from the same lease or from another source, the lessee
shall allocate unprocessed gas, residue gas, and gas plant products between the
qualified gas from the lease and the non-qualified gas as follows:
(1) the lessee shall account for unprocessed
gas delivered from a pipeline downstream of the inlet of the Alaska mainline on
the basis of the quantity of each component of unprocessed gas delivered from
the pipeline; the lessee shall allocate, on a component-by-component basis,
unprocessed gas between the qualified gas from the lease and non-qualified gas;
the allocation to a lease must be based on a percentage for the lease
representing a ratio, the numerator of which is the quantity of the component
of qualified gas from the lease that the lessee or its affiliate delivered into
the pipeline during the royalty reporting period and the denominator of which
is the total quantity of the same component that the lessee or its affiliate
delivered into the pipeline from other sources during the royalty reporting
period;
(2) residue gas resulting
from processing by the lessee or its affiliate in any processing plant serviced
by a pipeline downstream of the inlet to the Alaska mainline must be allocated
between the qualified gas from the lease and non-qualified gas on the basis of
MMBtus; the allocation to a lease must be based on the percentage for the lease
representing a ratio, the numerator of which is the quantity of a 100 percent
share of the methane plus the quantity of a fractional share of the ethane in
the qualified gas from the lease that the lessee or its affiliate delivered
into the pipeline during the royalty reporting period, and the denominator of
which is the quantity of all the methane plus the quantity of a fractional
share of all the ethane that the lessee or its affiliate delivered into the
pipeline from other sources during the royalty reporting period; the fractional
share of ethane to be used for purposes of allocation under this paragraph is
the weighted average extraction plant recovery rate for ethane in residue gas
for all processing plants serviced by the pipeline and used by the lessee or
its affiliate in the royalty reporting period;
(3) the NGL mix resulting from processing by
the lessee or its affiliate in any processing plant serviced by a pipeline
downstream of the inlet to the Alaska mainline shall be allocated by the lessee
between qualified and non-qualified gas from the lease; an allocation must be
made for each component in the NGL mix; the allocation to a lease must be based
on the percentage for the lease representing a ratio, the numerator of which is
the quantity of the component in the qualified gas from the lease that the
lessee or its affiliate delivered into the pipeline during the royalty
reporting period, and the denominator of which is the quantity of the component
the lessee or its affiliate delivered into the pipeline from other sources
during the royalty reporting period;
(4) the lessee shall allocate between
qualified gas from a lease and non-qualified gas a fractionated gas plant
product resulting from processing by the lessee or its affiliate in a
processing plant serviced by a pipeline downstream of the inlet to the Alaska
mainline; the allocation to a lease must be based on the percentage for the
lease representing a ratio, the numerator of which is the quantity of a
component in the qualified gas from the lease that the lessee or its affiliate
delivered into the pipeline during the royalty reporting period, and the
denominator of which is the quantity of the same component that the lessee or
its affiliate delivered into the pipeline from other sources during the royalty
reporting period; the component to be used for purposes of allocation under
this paragraph is the component that corresponds with the fractionated gas
plant product.
(d) If a
lessee or its affiliate transports both qualified and non-qualified gas from a
lease or from another source between the same receipt and delivery points for a
pipeline under more than one agreement with the pipeline, and if the agreements
contain different charges for the same service, the lessee shall allocate the
qualified and non-qualified gas from the lease or from another source between
the agreements based on MMBtus. However, qualified gas transported on the
Alaska mainline or Canada mainline shall be allocated only to firm
transportation capacity acquired through a commitment made in the first binding
open season for the mainline.
(e)
The actual and reasonable costs allowed for transportation under
11 AAC 25.060 -
11 AAC 25.090 and
11 AAC 25.160 -
11 AAC 25.210 must be allocated
between unprocessed gas, residue gas, gas plant products, and LNG by
destination according to the methodology set out in the applicable
transportation services agreement. If the transportation services agreement
does not set out a methodology, allocation must be based on MMBtus and mileage
of haul.
(f) If a lessee or its
affiliate processes both qualified and non-qualified gas from a lease or from
another source at a processing plant downstream of the inlet to the Alaska
mainline under more than one agreement with that plant for processing, and if
the agreements contain different charges for the same service, the qualified
gas from the lease and non-qualified gas must be allocated proportionately
between the agreements.
(g) In
allocating under this section the value of unprocessed gas, residue gas, gas
plant products, and LNG between qualified and non-qualified gas from a lease or
to another source, a lessee may either adjust volume for a pipeline, plant, and
tanker in-kind fuel requirement, for gain, and for loss for all gas from any
source using the method set out in
11 AAC 25.090 or not make an
adjustment for gas from any source for that purpose under this subsection.
After a lessee chooses whether to adjust volumes for the purpose of this
subsection, it cannot change its choice without the commissioner's
approval.
Authority:AS
38.05.020
AS 38.05.180
AS
43.90.310
