11 AAC 25.900 - Definitions

In this chapter, unless the context requires otherwise,

(1) "actual cost" means the full consideration paid;

(2) "affiliate" has the meaning given in AS 43.90.900;

(3) "AFUDC" means allowance for funds used during construction;

(4) "Alaska mainline"

(A) means, with respect to the pipeline system licensed under AS 43.90, the section of the pipeline system that is within this state, that originates at a point in or near Prudhoe Bay, and that terminates at one or more of the following locations:

(i) the Alaska/Yukon border near Beaver Creek;

(ii) Valdez; and

(B) does not include a gas pipeline upstream of the Prudhoe Bay unit, a gas pipeline between Point Thomson and Prudhoe Bay, a gas treatment plant on the North Slope, other facilities used to treat gas to meet pipeline specifications, or an LNG plant or terminal;

(5) "allowance" means a deduction in determining the monthly value of the state's royalty share of qualified gas;

(6) "area" means a geographic region or geologic province, including the Cook Inlet basin or the North Slope of the state;

(7) "arm's length" or "arm's length contract" means a contract or agreement that when executed or made and for each royalty reporting period that it remains in effect is between independent persons who are not affiliates and who have opposing economic interests regarding that contract or agreement;

(8) "Btu" or "British thermal unit" means the quantity of heat required to raise the temperature of one pound of water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a constant pressure of one atmosphere;

(9) "Canada mainline" has the meaning given "Yukon - BC Section" in TransCanada Alaska Company LLC's original, November 30, 2007 application for license under AS 43.90; the definition of "Yukon - BC section" at page 12 of the glossary in that application is adopted by reference;

(10) "commissioner" means the commissioner of natural resources;

(11) "commissioners" means the commissioner of natural resources and the commissioner of revenue, jointly;

(12) "component" means a constituent part of gas, whether hydrocarbon or nonhydrocarbon; "component" includes

(A) methane;

(B) ethane;

(C) propane;

(D) butane;

(E) isobutane;

(F) normal butane;

(G) pentane;

(H) pentane plus;

(I) condensate recovered downstream of the inlet to the Alaska mainline; and

(J) carbon dioxide and other nonhydrocarbon gases;

(13) "compression" means the process of raising the pressure of gas;

(14) "condensate" means liquid hydrocarbons existing initially in a gaseous phase in an underground reservoir normally exceeding 40 degrees of API gravity, recovered at the surface as a result of condensation without resorting to processing;

(15) "contract" means an oral or written agreement, including amendments or revisions, between two or more persons with due consideration that creates an obligation enforceable by law;

(16) "control" has the meaning given in AS 43.90.900;

(17) "department" means the Department of Natural Resources;

(18) "destination," when used to refer to the destination of unprocessed gas, residue gas, gas plant products, condensate, or LNG, means destination as determined under 11 AAC 25.080 and 11 AAC 25.100(b);

(19) "downstream" means a point

(A) physically connected by one or more natural gas pipelines; and

(B) generally further from the lease or unit of production, along a path on which gas is flowing from supply receipt points to demand delivery points;

(20) "FERC" means the Federal Energy Regulatory Commission of the United States Department of Energy, or the agency succeeding to its regulatory functions;

(21) "FERC Form 2" means the Federal Energy Regulatory Commission's FERC Financial Report, FERC Form No.2: Annual Report of Major Natural Gas Companies, as revised as of March 26, 2010 and adopted by reference;

(22) "field" means that part of an area underlain by one or more overlapping, contiguous, or superimposed pools, including the Prudhoe Bay field;

(23) "first binding open season" means the project's first open season

(A) in which the licensee requires binding bids for capacity from shippers; and

(B) that concludes no later than December 5, 2011;

(24) "first destination market" means a market that the commissioner has designated a first destination market under 11 AAC 25.100;

(25) "fractionated gas plant product"

(A) means any of the following gas plant products:

(i) ethane;

(ii) propane;

(iii) butane;

(iv) isobutane;

(v) normal butane;

(vi) pentane;

(vii) pentane plus;

(B) does not include NGL mix or condensate;

(26) "gas" means all natural gas and hydrocarbons produced at a well not defined as oil under 11 AAC 88.185;

(27) "gas plant product"

(A) means a separate marketable element, compound, or mixture, whether in liquid, gaseous, or solid form, resulting from processing gas after the inlet to the Alaska mainline;

(B) includes

(i) NGL mix;

(ii) ethane not included in residue gas;

(iii) propane;

(iv) butane;

(v) isobutane;

(vi) normal butane;

(vii) pentane; and

(viii) pentane plus;

(C) does not include residue gas, methane, or condensate;

(28) "gathering" means the movement of lease production to a central accumulation or treatment point, whether that point is on or off the lease or unit of production;

(29) "lease" has the meaning given in AS 43.90.900; "lease" includes a unit agreement or royalty settlement agreement that amends the lease;

(30) "lease of production" means the state oil and gas lease or gas only lease from which gas is produced;

(31) "mainline" means either the Alaska mainline or the Canada mainline, as applicable;

(32) "marketing affiliate" means an affiliate of the lessee whose functions include acquisition of the lessee's production and marketing that production;

(33) "Mcf" or "Mcf of gas" means 1,000 cubic feet of gas measured at 60 degrees Fahrenheit and 14.65 pounds per square inch (absolute);

(34) "MMBtu" means 1,000,000 British thermal units;

(35) "NGL" means one or more natural gas liquids that, singly or in combination, are extracted or recovered from unprocessed or partially processed gas; "NGL" includes

(A) ethane;

(B) propane;

(C) butane;

(D) isobutane;

(E) normal butane;

(F) pentane; and

(G) pentane plus;

(36) "NGL mix" means a mixture of natural gas liquids that

(A) contains two or more of the following components in more than trace quantities:

(i) ethane;

(ii) propane;

(iii) butane;

(iv) pentane; and

(B) is generally the product of extraction at a processing plant but not fractionation;

(37) "North Slope" has the meaning given in AS 43.90.900;

(38) "North Slope gas" means gas produced on the North Slope;

(39) "open season" has the meaning given in AS 43.90.900;

(40) "pentane plus" means pentane and heavier hydrocarbons extracted or fractionated at a gas processing plant;

(41) "processing"

(A) has the meaning given "gas processing" in AS 43.90.310(a)(2)(C);

(B) includes processes designed to remove hydrocarbon or nonhydrocarbon elements or compounds from gas after the gas has entered the Alaska mainline, including absorption, adsorption, or refrigeration;

(42) "processing allowance" means an allowance determined under 11 AAC 25.060 - 11 AAC 25.090 and 11 AAC 25.230 - 11 AAC 25.260 for the actual and reasonable costs of processing gas;

(43) "profile for capital recovery" means the depreciation profile, including levelization if used, and the amount of capital to be recovered over the contract term expressed as a percentage;

(44) "project" has the meaning given in AS 43.90.900;

(45) "qualified gas" means gas that is qualified under 11 AAC 25.030 for royalty inducements;

(46) "qualified person" means a lessee or other person who qualifies under 11 AAC 25.020;

(47) "residue gas" means hydrocarbon gas that, after processing, consists primarily of methane, has a maximum heating value of 1,110 Btus per cubic foot, and is suitable for end-user markets;

(48) "royalty reporting period" means the calendar month in which gas or associated substances are produced and either removed or sold from a lease, or from a unit if the lease is within a unit;

(49) "royalty settlement agreement" means a settlement agreement that

(A) is executed by the state and one or more lessees and approved by a court; and

(B) resolves all or a portion of royalty issues in dispute in litigation;

(50) "transportation allowance" means an allowance for the actual and reasonable cost of moving qualified gas away from the unit of production to destination; "transportation allowance" does not include gathering costs or any other cost incurred with regard to the lease or unit of production;

(51) "transportation affiliate" means an affiliate of the lessee whose principal function is transportation of hydrocarbons by pipeline or tanker, and who transports some or all of the lessee's gas;

(52) "unit of production" means the oil and gas unit, or gas only unit, from which gas is produced;

(53) "unprocessed gas" means gas that is not residue gas, a gas plant product, or LNG;

(54) "upstream" means a point

(A) physically connected by one or more natural gas pipelines; and

(B) generally closer to the lease or unit of production when traveling opposite the path on which gas is flowing from supply receipt points to demand delivery points;

(55) "1980 Prudhoe Bay Royalty Settlement Agreement" means the royalty settlement agreement approved by the superior court in In the Matter of ANS Royalty Litigation, 1JU-77-847 Civil on August 13, 1980;

(56) "1995 ANS Royalty Settlement Agreements" means the royalty settlement agreements approved by the superior court in In the Matter of ANS Royalty Litigation, 1JU-77-847 Civil on March 15, 1995, April 6, 1995, April 7, 1995, or May 22, 1995.

Notes

11 AAC 25.900

Eff. 5/29/2010, Register 194

Authority:AS 38.05.020

AS 38.05.180

AS 43.90.300

AS 43.90.310

AS 43.90.330

AS 43.90.410