11 AAC 25.140 - Quality differentials for unprocessed gas

(a) The commissioner will establish a quality differential to be used in valuing unprocessed gas.

(b) The commissioner will establish a quality differential to allow a lessee that elects not to take a processing allowance for qualified gas to deduct a quality differential that is representative of processing costs.

(c) In establishing a quality differential, the commissioner will consider

(1) the cost of gas processing;

(2) standard deductions allowed or used by other governments or royalty owners to reflect quality differences or processing costs, including the fractionation allowance allowed by the Alberta government for fractionating propane, butane, and pentane plus;

(3) the composition of a lessee's gas or gas from a North Slope lease, unit, participating area, or reservoir; and

(4) other factors relevant to whether a quality differential is representative of processing costs.

(d) The commissioner will post quality differentials on the department's website at least 15 days before a royalty report affected by the quality differential is due. The commissioner may add to, replace, or remove entries on the list of quality differentials by posting a revised list of quality differentials on the department's website at least 15 days before a royalty report is due. A location differential posted by the commissioner on the department's website under this section is not subject to retroactive change.

Notes

11 AAC 25.140

Eff. 5/29/2010, Register 194

Authority:AS 38.05.020

AS 38.05.180

AS 43.90.310