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AGDC gains tax-exemption status

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LNG Industry,

Alaska Gasline Development Corp. (AGDC) has announced that it has qualified as a tax-exempt political subdivision of the State of Alaska under new and more stringent proposed US Internal Revenue Service (IRS) regulations.

Keith Meyer, the President of AGDC, said: “This is great news for the corporation and the Alaska LNG project.

“Receiving a favourable tax ruling from the IRS was one of the expectations of the transition of the Alaska LNG project to state leadership. The favourable ruling from the IRS will provide significant manoeuvring room as we shape the financial structure of the Alaska LNG project. This is our next great energy project as a state and important for America to move into a position of major energy supplier to our overseas trading partners.”

As a political subdivision, AGDC claims that it will not be subject to federal income tax and can issue tax-exempt debt. The federal tax exemption can further reduce the cost of service on the system, and can increase the project’s competitiveness, whilst also improving overall returns to project stakeholders.

AGDC claims that it was not depending on this ruling to make the Alaska LNG project economically viable. Nonetheless, the ruling does create an opportunity – under the right conditions – for lower cost debt financing, and makes the project more competitive.

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LNG project news US LNG news LNG export news Natural gas news