Alaska Administrative Code › Title 11 - Natural Resources › Part 3 - Oil and Gas › Chapter 25 - Royalty Election Under Alaska Gasline Inducement Act › 11 AAC 25.210 - Non-allowable transportation costs

Current through May 31, 2024
(a) A lessee may
				not include the following costs in calculating an arm's length transportation
				allowance under
				11 AAC 25.170 or a non-arm's
				length transportation allowance under
				11 AAC 25.180 -
				11 AAC 25.200:
(1) the cost of transportation of qualified
				gas downstream of destination;
(2)
				the cost of transportation of residue gas or gas plant products after
				processing of qualified gas is complete at destination;
(3) a cost or fee incurred for storage,
				except that a lessee may deduct
(A) a charge
				by a pipeline for storage for no more than 30 days if the storage is required
				under the applicable transportation services agreement and is necessary for
				pipeline operations;
(B) a cost or
				fee for the storage as part of LNG transportation, if the fee or cost is
				allowed under
				11 AAC 25.200;
(4) an intra-hub transfer fee paid
				to a pipeline hub operator for administrative services, including accounting
				for the sale of qualified gas within a hub and title transfer
				tracking;
(5) a fee paid to a
				scheduling service provider;
(6)
				internal costs to schedule, nominate, and account for the sale or movement of
				qualified gas, if incurred by a lessee or its affiliate other than a
				transportation affiliate; those costs include salaries and related costs, rent
				and space costs, office equipment costs, and legal fees;
(7) an aggregator or marketer fee, including
				a fee a lessee or its affiliate pays an affiliate or another person to market,
				purchase, or resell qualified gas, or find or maintain a market for qualified
				gas;
(8) a fee paid to a broker,
				including a fee paid to a person that arranges marketing or
				transportation;
(9) a penalty
				incurred as a shipper, including
(A) an
				over-delivery cash-out penalty, including the difference between the price the
				pipeline pays for over-delivered volumes outside the tolerances and the price
				received for over-delivered volumes within the tolerances;
(B) a scheduling penalty, including a penalty
				incurred for differences between daily volumes delivered into the pipeline and
				volumes scheduled or nominated at a receipt or delivery point;
(C) an imbalance penalty, including a penalty
				incurred for differences between volumes delivered into the pipeline and
				volumes scheduled or nominated at a receipt or delivery point;
(D) an operational penalty, including fees
				incurred for violation of the pipeline's curtailment or operational orders
				issued to protect the operational integrity of the pipeline;
(10) the cost of pipeline
				transportation within the unit of production, unless
(A) the pipeline is regulated by FERC or the
				Regulatory Commission of Alaska; or
(B) for Prudhoe Bay gas covered by the 1980
				Prudhoe Bay Royalty Settlement Agreement, the cost is allowed under that
				agreement;
(11) the cost
				of pipeline transportation within a state unit other than the unit of
				production where the gas was reinjected into a reservoir, unless
(A) the pipeline is regulated by FERC or the
				Regulatory Commission of Alaska; or
(B) for Prudhoe Bay gas covered by the 1980
				Prudhoe Bay Royalty Settlement Agreement, the cost is allowed under that
				agreement;
(12) the cost
				of a gathering pipeline or a pipeline in the state that is not subject to
				regulation by FERC or the Regulatory Commission of Alaska;
(13) as provided in
				11 AAC 25.070(d),
				the cost of transporting carbon dioxide in a pipeline upstream of the Alaska
				mainline in excess of quantities allowed in the specification of conditions for
				acceptance into the Alaska mainline;
(14) the cost of transporting a gas or
				associated substance that is not royalty-bearing, except that lessees may
				include in a transportation allowance the costs of transporting carbon dioxide
				in quantities not to exceed the quantities allowed in the specification of
				conditions for acceptance into the Alaska mainline;
(15) other costs a lessee incurs for services
				it is required to provide at no cost to the state as lessor or
				otherwise;
(16) costs of
				arbitration, litigation, or other dispute resolution activity that involves the
				state or concerns the rights or obligations
(A) among owners of a transportation entity;
				or
(B) between an owner of a
				transportation entity and a shipper.