CIRI is excited to announce that it has joined forces with MidAmerican Energy Holdings Company, a subsidiary of Berkshire Hathaway, Inc., to build a proposed 745-mile pipeline to transport natural gas from Alaska’s North Slope along the Alcan Highway to Lower 48 markets. The agreement means that CIRI will invest directly as an equity partner in a trans-Alaska/trans-Canada natural gas pipeline if the project proceeds.

MidAmerican Energy Holdings Company proposes to use Alaska’s “Stranded gas” regulations to negotiate tax and financial terms to facilitate the transportation of natural gas in its proposed Federal Energy Regulatory Commission-regulated open access pipeline. Such a pipeline would provide an outlet for stranded gas from the North Slope to the Lower 48. MidAmerican is a privately owned global provider of energy services that has the experience, expertise and financial wherewithal to successfully complete this gas pipeline project.

On Jan. 28, the Alaska Department of Revenue approved the Alaska Gas Transmission Company’s application to enter into negotiations on fiscal and tax issues related to building a natural gas pipeline to facilitate the transportation of stranded Alaska natural gas. Projections indicate that the pipeline can be profitable, if the federal loan guarantees and accelerated depreciation incentives contained in the energy bill that Congress is currently considering become law. The deal may also need favorable use of Alaska Railroad bonding authority.

Alaska Gov. Frank Murkowski said, “This clears the way for negotiations to begin on a draft contract. We will hold preliminary talks with the companies immediately, with formal negotiations following shortly thereafter. We believe the consortium of companies led by MidAmerican is highly qualified to construct the project they have proposed, and we expect to negotiate with them from that basis.”

CIRI has a longstanding business relationship with Robert E. Denham, a partner in the law firm of Munger Tolles & Olson, which led directly to a relationship with MidAmerican. At the end of 2003, CIRI President & CEO Carl Marrs and Chief Operating Officer Mark Kroloff entered into negotiations with senior MidAmerican officials for CIRI to become an equity participant in the project.

CIRI individually will hold up to a 9.95-percent interest in the pipeline project. In addition, Pacific Star Energy, a consortium of Alaska Native regional corporations in which CIRI will also invest, will hold up to a 9.95-percent interest in the project.
“This agreement is the direct result of our long-held philosophy of cultivating relationships with outstanding business partners who are capable of executing complex transactions,” said Marrs.

“This is an outstanding pipeline deal for all of Alaska,” said Marrs. “Alaskans don’t have any ownership interest in the trans-Alaska pipeline system and it has piped millions of dollars worth of Alaska oil wealth and jobs outside. But Alaska companies will be directly involved in this gas pipeline, helping to keep profits and jobs in the state.”
CIRI representatives also have worked hard to involve the 12 Alaska Native regional corporations in this deal through the Pacific Star Energy coalition. Fortunately, CIRI’s recent financial performance has allowed it to accrue the funds needed to participate in the project independently.