U.S. bill to raise Alaska gas pipeline loan guarantee
WASHINGTON, June 8 (Reuters) - Key U.S. lawmakers have reached a deal on legislation that would boost the federal government's loan guarantee for building a massive pipeline that would transport Alaska's huge natural gas reserves to the lower 48 States.
Senate Energy and Natural Resources Committee Democratic chairman Jeff Bingaman and top panel Republican Lisa Murkowski have agreed to a measure that would raise the 2004 loan guarantee program for the pipeline project to $30 billion from $18 billion.
TransCanada Corp (TRP.TO: Quote, Profile, Research, Stock Buzz) received a state license in December to build a $26 billion pipeline from Alaska to a pipeline hub in Alberta. North Slope Gas producers BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) and ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) have also proposed an Alaskan gas line project, however.
Either project would be eligible for the Senate measure, which also clarifies that the federal government will step in and repay loans for up to 80 percent of the cost of the total project if the pipeline's owners default on the financing.
"Hopefully these changes will speed the pace of efforts to get a gas line built and offset the financial challenges caused by lower natural gas prices and tighter financial markets," Murkowski said in a statement.
Since the 1970s government officials and industry groups have sought to construct a pipeline that would be used to ship the North Slope's known natural gas reserves of 35 trillion cubic feet.
If approved, the pipeline measure will be folded into a larger energy package that tackles a variety of issues including establishing a renewable electricity standard and increasing appliance efficiency standards. The Senate panel is set to vote on the entire energy bill as early as Tuesday.