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Walker plans to pursue 2 export-capable gas pipelines, pick plan that makes the most sense

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JUNEAU, Alaska — Gov. Bill Walker said he wants Alaska to pursue two natural gas pipeline projects, both of which would be capable of exporting liquefied natural gas.

The state has been pursuing a major liquefied natural gas project known as Alaska LNG with BP PLC, Exxon Mobil Corp., ConocoPhillips, TransCanada Corp. and the Alaska Gasline Development Corp., or AGDC. That will continue, Walker said. But he said he didn't want to pin the state's hopes on that project alone.

He told reporters Thursday that he was looking at increasing the volume of a smaller stand-alone gas line project, which had been geared toward providing gas to Alaskans, and having it run to a port for exports. AGDC has been pursuing the stand-alone project.

In an editorial published late Wednesday on Alaska newspaper websites, Walker said the smaller project, known as the Alaska Stand Alone Pipeline, as originally proposed would have generated little or no revenue to the state and likely would have required a large annual subsidy.

Whichever is first to produce a "solid plan" with terms acceptable to the state would get full state support, Walker wrote. Or, he said, the two might be combined.

"Given our financial situation, we can no longer afford to stand by and wait while Alaska's future is decided in the boardrooms of international corporations that have competing global interests," Walker wrote.

The state faces projected multibillion-dollar budget deficits amid a crash in oil prices, and the stand-alone project was among the big-ticket projects for which Walker late last year had halted new spending pending a review.

Under the prior administration, the stand-alone line had been seen as a fallback should the big project falter. The possibility of the two projects merging at some point also had been raised.

But a bill passed by the Legislature last year, setting the state's participation in the liquefied natural gas project, laid the groundwork for releasing the size restrictions that had been placed on the stand-alone pipeline as part of a prior, failed effort to bring about a gas project. Walker said that was a factor in his change of tone on the stand-alone line.

Many lawmakers see the liquefied gas project as the state's next best chance for significant revenue. House Speaker Mike Chenault, who with fellow Republican Rep. Mike Hawker played a lead in crafting the legislation creating AGDC, told reporters the state should do everything it can as a partner to move Alaska LNG forward. Hawker said AGDC was not designed to go into competition with the state's producer partners.

Other lawmakers, including Sen. Bill Wielechowski, D-Anchorage, saw Walker's proposal as a good move.

Walker said he spoke with officials from the companies and got no pushback.

Miles Baker, vice president of external affairs and government relations for AGDC, said AGDC is ready to implement whatever policy directive it receives.

On Thursday, Walker also announced three new appointments to the AGDC board. Walker had removed three members after taking office, saying he wanted Alaskans on the board and more geographic representation.

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