Judge tosses lawsuit questioning constitutionality of tax credit bonds
Elwood Brehmer, Alaska Journal of Commerce, January 3, 2019
The small oil companies and banks holding more than $800 million in refundable tax credits scored a victory Wednesday when an Alaska Superior Court judge threw out a lawsuit challenging the state’s plan to sell bonds to pay off those credits. Judge Jude Pate granted the State of Alaska’s motion to dismiss the suit filed by former University of Alaska regent Eric Forrer arguing against the constitutionality of the bond scheme contained in House Bill 331 that the Legislature approved last spring.
Our Take: Though AKHEADLAMP appreciates this decision, the likely appeal will delay payments that are owed and continue to create an environment of instability. Instability is the enemy of investment “When the earned credits weren’t paid off in full in the fiscal years 2016-18 state budgets, as had previously been done, the banks holding them mostly stopped lending into the Alaska oil sector.” Enough said.
Alaska gives Chinese firms more time to consider LNG deal
Carl Surran, Seeking Alpha, January 4, 2019
Alaska’s government says it extended a deadline for Sinopec (NYSE:SNP) and other Chinese companies to agree on liquefied natural gas purchases and financing for the $43B Alaska LNG project. State-owned Alaska Gasline Development Corp. says it is typical in negotiations on large energy projects to see deadlines extended – by six months, in this instance – but that the current U.S.-China trade dispute has added complications. If built, the project would export up to 20M metric tons/year of LNG, with 15 tons/year reserved for China in the deal now being discussed and 5M available for other potential customers such as Japan and Vietnam.
Related:
China’s Sinopec says losses at trading arm Unipec under audit
China looks to LNG as cold weather sweeps in
Xu Yihe, Upstream Online, January 3, 2019
China is again relying on liquefied natural gas imports to meet peak energy demand this winter but is expected to see fewer spot cargoes coming in as major importers have already secured enough long-term supplies. Industry officials said that in the winter season running from November 2018 to March 2019, China’s LNG purchases from the spot market or based on short- term supply contracts will be down by 30% to about 3.4 million tonnes versus the last winter season. “Chinese buyers are well prepared for the possible supply crunch this winter and therefore have tried to secure more supplies based on long-term contracts in order to cushion against possible price hikes in spot cargoes,” said one official from China National Petroleum Corporation (CNPC).
