Alaska Administrative Code
Title 11 - Natural Resources
Part 3 - Oil and Gas
Chapter 25 - Royalty Election Under Alaska Gasline Inducement Act
11 AAC 25.270 - Plant costs for LNG

(a) In calculating the monthly value of the state's royalty share of qualified gas, a lessee may deduct plant costs for liquefaction and regasification using the same rules for the deduction of plant costs for processing set out in 11 AAC 25.060 - 11 AAC 25.090 and 11 AAC 25.230 - 11 AAC 25.260, except as provided in this section. LNG plant costs will be allowed only if they are the actual and reasonable plant costs incurred and paid by the lessee or its affiliate and not refunded to the lessee or its affiliate for liquefaction or regasification of qualified gas between the inlet to the Alaska mainline and destination.

(b) With respect to storage, the prohibition set out in 11 AAC 25.260(b) (3) applies in the case of LNG only after regasification is complete.

(c) For purposes of this section, an LNG plant is an affiliate of a lessee if the lessee and the LNG plant are affiliated at any time during the royalty reporting period, or were affiliated when the contract with the plant was executed or an agreement with the plant was made.

(d) In this section, in addition to having the meaning given in 11 AAC 25.900, "processing" includes liquefaction and regasification.