Anchorage/Juneau/Fairbanks I. CALL TO ORDER II. ROLL CALL · • Longer term: 30-year levelized vs....

AGENDA ALASKA GASLINE DEVELOPMENT CORPORATION

BOARD OF DIRECTORS REGULAR MEETING

December 4, 2013 9:00am Anchorage/Juneau/Fairbanks

I. CALL TO ORDER

II. ROLL CALL

III. APPROVAL OF AGENDA

IV. APPROVAL OF MINUTES: November 25, 2013

V. PUBLIC COMMENTS: Anchorage________ Fairbanks ________ Juneau _________

VI. NEW BUSINESS A. Continuation of PowerPoint Presentation to the Board

by AGDC Staff relating to ASAP Project. B. Discussion of Budget in Terms of the Process. C. Discussion of Audited Financials and Annual Report D. Discussion of Annual Budget E. Consideration of Draft Bylaws F. Discussion of the Status of the Governance Process G. Discussion of Authorization and Staff Expectations

VII. EXECUTIVE SESSION

VIII. ANY OTHER MATTERS TO PROPERLY COME

BEFORE THE BOARD

IX. ADJOURNMENT The Chair may announce changes in the Order of Business during the meeting.

Meeting Minutes

ALASKA GASLINE DEVELOPMENT CORPORATION REGULAR BOARD OF DIRECTORS MEETING

November 25, 2013 09:00 am A Regular Board of Directors Meeting of the Alaska Gasline Development Corporation (“AGDC”) was held at the AGDC, 3201 C Street, Suite 200 Anchorage, Alaska on November 25, 2013, commencing at 09:00a. The following board members were present at the meeting (or attended via teleconference): RICHARD RABINOW Member of the Board Houston, Texas ALBERT BOLEA Member of the Board Spring, Texas DRUE PEARCE Member of the Board Washington D.C. Acting Chair DIANNE BLUMER Member of the Board Anchorage, Alaska DAVE CRUZ Member of the Board Palmer, Alaska

Meeting Minutes

I. CALL TO ORDER. Acting Chair Drue Pearce called the meeting to order at 9:01a.

II. ROLL CALL. A quorum was declared present and the meeting

was duly and properly convened for the transaction of business.

III. APPROVAL OF AGENDA. Acting Chair Drue Pearce asked for a motion to approve. At 9:03a Dave Cruz motioned, Dianne Blumer second. 5 Board Members approved, 2 were not present.

IV. MINUTES of October 30, 2013. Acting Chair Drue Pearce asked for a motion to approve. At 9:05 Dave Cruz motioned, Al Bolea second. 5 Board Members approved, 2 were not present.

V. PUBLIC COMMENTS. In Anchorage: None In Fairbanks: None In Juneau: None

VI. NEW BUSINESS: AGDC Key Staff presented a project update to the board of directors. The update was a 2 hour PowerPoint presentation which included an introduction by Dan Fauske, President of AGDC. Ken Vassar, General Counsel, covered the AGIA Limitation. Daryl Kleppin, Commercial Manager and Frank Richards, Director Pipeline Engineering presented the ASAP scope, schedule and budget. Open season was presented by Daryl Kleppin, and Dave Haugen, Project Manager presented Engineering. Dan Fauske, Joe Dubler, Ken Vassar, Frank Richards, Daryl Kleppin and Dave Haugen fielded all questions brought to the table by the board. Due to time constraints the rest of the project update will be presented at December 4th board meeting.

Meeting Minutes

VI. ANY OTHER MATTERS TO PROPERLY COME BEFORE THE BOARD. None

VII. Acting Chair Drue Pearce asked for a motion to adjourn, Richard

Rabinow motioned, Al Bolea second. Meeting ended at 10:58a.

_______________________________ ________ John Burns, Chairman of the Board Date

Project Update to Board of Directors Presented by: ASAP Project Team November 25, 2013

ASAP Update 1. Introduction

2. AGIA limitation 3. ASAP scope, schedule and budget 4. Open season 5. Engineering 6. Regulatory 7. Construction and operations 8. Contracting 9. Work ahead 10. Issues/opportunities

1

AGIA Limitation

2

AGIA overview and its impacts on ASAP 500 Mmscf* limitation

• AS 43.90.440(a) provides project assurance to an AGIA licensee by entitling it to payment from the state, if the state extends certain incentives to a “competing natural gas pipeline project.”

• AS 43.90.440(c)(1) defines “competing natural gas pipeline project” as "a project designed to accommodate throughput of more than 500,000,000 cubic feet a day of North Slope gas to market."

• AS 43.90.900(16) “North Slope” means that part of the state that lies north of 68 degrees North latitude.

* Mmscf = Million standard cubic feet

3

Alaska Stature (AS) 31.25 and ASAP

• Alaska Gasline Development Corporation (“AGDC”) Statute • AS 31.25.080(c): The corporation may not develop or construct a natural

gas pipeline that is a competing natural gas pipeline project for purposes of AS 43.90.440.

• AS 31.25.080(f): The corporation shall, to the maximum extent practicable without delaying the progress of developing an in-state natural gas pipeline project and without causing the in-state natural gas pipeline project to become a competing natural gas pipeline project for purposes of AS 43.90.440, coordinate with and accommodate the developers of a large-diameter in-state natural gas pipeline by planning for the development and use of common pipeline facilities from the North Slope to the Livengood area or to another point from which a large-diameter in-state natural gas pipeline may be constructed south to tidewater in either the Prince William Sound or Cook Inlet area. In this subsection, "large-diameter in-state natural gas pipeline" means a pipeline in the state with a diameter of 42 inches or more.

4

Scope/Schedule/Budget

5

24” diameter pipe 2,500 psi max Fairbanks Lateral:

12” diameter pipe, tie-in with mainline at MP 458 North Slope GCF at

Prudhoe Bay Straddle Plants NGL Extraction

Plant Fractionation

Facility Intermediate

Compressor Stations

2011 Plan vs. Optimized Project Scope

6.1

24” diameter pipe 2,500 psi max Fairbanks Lateral:

12” diameter pipe, tie-in with mainline at MP 458 North Slope GCF at

Prudhoe Bay Straddle Plants NGL Extraction

Plant Fractionation

Facility Intermediate

Compressor Stations

2011 Plan vs. Optimized Project Scope

36” diameter pipe 1,480 psi max Fairbanks

Lateral: 12” diameter pipe, tie-in with mainline at MP 458 North Slope GCF

at Prudhoe Bay More off-takes

possible

6.2

Optimized Project Plan Benefits

• Eliminated facilities - compressor station(s), straddle plants, NGL extraction and fractionation, de-ethanizer

• Increased pipe diameter with lower operating pressure is industry standard - pipe & equipment readily available

• Less risk with fewer facilities, standardized equipment, and greater system reliability

• Total cost of the processing facilities is much lower • Propane extraction still available for in-state demand • Design process straightforward – less cost and improved schedule • Lower O&M costs • More off-take points will maximize gas access for Alaskans • Stand-alone system is not dependent upon downstream facilities • Lower Fairbanks tariff

7

Optimized Project Tariff Update

• Longer term: 30-year levelized vs. original 20-year

• Updated capital cost estimates with more appropriate contingency

• Pipeline now 10% vs. 5% (facilities 30%)

• Equity share and return on equity adjusted

• Debt/equity split now 75/25 vs. 70/30

• ROE 11% vs. 12%

• Year delay ($2011 -> $2012)

• 2.5% inflation per year

8

• Cost to Alaskans: $400M up-front to be recovered through gas royalty and taxes

• Cost Benefit: Long-term natural gas supply for Alaskans

• Project Cost: $7.7 Billion* in 2012 dollars, +/- 30%

• Cost of Gas to Consumers (burner tip)

ASAP Costs

• Anchorage • Fairbanks • Optimized $ 9 - 11.25/MMBtu in

2012 dollars

• Base case $ 9.63/MMBtu in 2011 dollars

• Optimized $ 8.25 - 10/MMBtu in 2012 dollars

• Base Case $ 10.45/MMBtu in 2011 dollars

*Each year the project is delayed, 2.5% inflation is added to the cost of the project

9

Scope/Schedule/Budget: Schedule

10

Scope/Schedule/Budget: AGDC and ASAP Budgets

12

AGDC and ASAP Budget

13

Alaska Gasline Development Corporation (AGDC) FEL 2 - 3 Funding Appropriated

$MM FY14 FY15 FY16 FY16+ Total

Total AGDC 85 138 107 330

Other SOA Agencies 2 3 5 16 25 (DOL, DNR, DEC, DOT&PF)

Total HB4 Fiscal Notes 87 141 111 16 355

Prior Year Re-Appropriation 16.5 16.5

FY14 + Funding 87 141 111 32 372

October Latest Estimate (LE) 62

AGDC Expenditures

14

• AGDC audited financial statements available: http://asapgas.agdc.us/reports.html

AGDC Project to Date Expenditures

October 2013 $MM

FY11 13.7

FY12 17.5

FY13 16.5

FY14 YTD 15.0

Fixed Assets 0.7

Total Spend 63.4

Note: Excludes expenditures prior to AGDC.

http://asapgas.agdc.us/reports.html

AGDC Operating Budget

15

• Governor’s annual operating budget process: • AGDC provides personal services costs, organization

chart, and interest earnings required • Heads-up meeting with OMB early September • Final AGDC personal services costs to OMB early

December • Governor’s budget released December 15 • Governor’s amended budget due to OMB January 15 • Legislature convenes January 21 – AGDC presents

project updates

Open Season

16

Open Season Process • AGDC files a Recourse Tariff (including Open Season

process) with Regulatory Commission of Alaska (RCA) • Stakeholder input incorporated by AGDC into ASAP tariff rate design / services offered

• RCA reviews and approves Recourse Tariff and Open Season procedures

• Sets 90 day timeline (potential 30 day extension) • Ensures no undue discrimination • Reviews supporting cost study and assumptions

• AGDC holds Open Season • Committed capacity bids • Precedent agreements (PAs)

• RCA reviews and approves contracts • 180 days to review • PAs, presubscription agreements • Recourse rate / negotiated rates • “Just and reasonable” criteria -> “arms length”

17

RCA Review of ASAP Recourse Tariff • ASAP required to submit to the RCA a complete Recourse Tariff,

including procedures for conducting an Open Season – Tariff

• Services offered • Rates / rules / regulations / terms and conditions of service • Cost of service based rates, levelized over depreciable

life of pipeline based on cost study • Method for awarding, or not awarding, pipeline capacity • Include a mechanism to provide additional relevant information

requested by potential shippers • Other characteristics needed to evaluate the proposed service –

as determined by ASAP – Form of PA – Form of the FTSA – Pipeline specific information (e.g., receipt and delivery points)

• ASAP may contract to provide FT for rates and containing provisions

different than those in the Recourse Tariff

18

• ASAP may enter presubscription agreements before the start of an Open Season, but not before an initial Recourse Tariff is approved

• Presubscription agreements are subject to the methods for awarding capacity set out in the Open Season notice

RCA Review Timeline

Carrier Submits

Recourse Tariff

90 days

RCA Actions

Review & Approve or

Deny

Not unduly discriminatory & reasonable terms

Start Open

Season

Carrier Submits

Precedent Agreements or Related Contracts

Presubscription Agreements

Review & Approve or

Deny

Carrier Submits

CPCN

180 Days 180 Days Review &

Approve or Deny

Carrier Submits Revised

Recourse Tariff

Just & reasonable

Fit, willing, & able

Not unduly discriminatory & reasonable terms

Review & Approve or

Deny

90 Days

Carrier Actions

End OS

30 days

Potential RCA Extension

30 Days Potential

RCA Extension

19

Open Season Schedule

• Major Schedule Milestones: • September 1, 2014 – Submit initial ASAP Recourse Tariff to RCA • January 31, 2015 – Initiate ASAP Open Season • March 31, 2015 – ASAP Open Season ends • June 1, 2015 – Submit Precedent Agreements and supporting

documentation to RCA

20

Engineering

21

Pipeline Engineering

• Michael Baker Jr. Inc. with support from CH2M Hill • Key staff located in Alaska

• Personnel/teams from other offices as required • Specialty Subcontractors in such areas as:

• Corrosion Protection • Field Geotechnical Drilling • Geotechnical Laboratory – Arctic testing • Climatic Baseline and Arctic Heat Transfer • Seismicity • Pipeline Integrity Assurance

• Key state agencies are assisting in areas: • DGGS – Seismic Fault Field Studies • DOTPF – Right of Way and Bridges

22

Pipeline Engineering - Field Programs

• 2013 Field Program complete • Ten different route areas south of Yukon River

– Denali Park area, Nenana to Rex area, Willow to terminus, Parks Highway Road and Rail crossings

– Two geophysical programs (Denali and Yukon) – Hundreds of boreholes completed – Frost heave testing of select samples – Extensive terrain unit verification – All information collated in GIS

• Winter 2014 program – South of Nenana, Minto Flats, and strategic locations North of

Livengood, including Gas Conditioning Facility site

23

Pipeline Engineering - Rev6 Alignment

• Alignment revisions needed to address • Problems with Rev5 – side-hill stability, unstable thermal state,

proximity to route avoidance features • Local optimizations ( e.g. straighten line reducing field bends,

moving away from identified developments…) • Construction assessments

• Extensive 2013 program • Review available mapping and propose potential alignment

revisions • Potential revisions reviewed in the field to cull down to a single

recommendation for each area • 38 separate ROW segment revisions were proposed

• Alternatives include avoiding AK DOTPF bridges, shifting route west of Nenana, Denali Park alternative, and shifting route to west side of Susitna River

24

PHMSA - Strain Based Design Process

• Special Permit may be required from USDOT Pipeline and Hazardous Materials Safety Administration (PHMSA)

• Special Permit is required (per the Code of Federal Regulations) to address Strain-Based Design (SBD)

• SBD establishes plans and criteria to address locations where the pipe may operate above the Specified Minimum Yield Strength (SMYS) of the pipe material due to:

– Thaw settlement – Frost heave

• Arctic SBD is new area for PHMSA • ASAP and PHMSA establishing protocol for over two years • ASAP work on SBD separated into two distinct efforts:

1. Strain demand - the potential strain that could develop in the pipe due to hazards identified along the ASAP route

2. Strain capacity - the ability of the pipe material to safely resist the imposed displacement

25

Pipeline Materials • Completed preliminary material specifications and fracture control

analysis • Soliciting interest from potential pipe vendors:

• Berg Europipe, JFE Steel, Sumitomo/Nippon • Interest in mainline pipe to withstand potential arctic route hazards • Each vendor to provide 10 pipe sections for testing

• Planned material testing includes: • Small scale testing for material properties (steel strength, fracture

toughness, welding procedures) • Analytical “testing” to calibrate material tests to material response

predictions • Full scale testing for verification of response predictions

• Full scale testing of pressurized 36” pipe only available at two locations in North America

26

Facilities Engineering

• Arctic Solutions Selected as Design Contractor – JV of Fluor and Worley Parsons Formed for N. Slope

Projects • Started Pre-FEED February, 2013 • Class IV Estimate Complete April 2014 • Peak Manning of 31 FTE’s/ 110 Total Involved

– Exceptionally Efficient Use of Part Timers – Several Taken Directly Off North Slope Projects

27

Gas Conditioning Facility

• 2 X 250MMSCFD Trains • Processing/Power Generation/Support Facilities • Based on Prudhoe Bay Unit Gas • Close Proximity to Central Gas Facility • Physical Solvent Process Selected to Remove CO2 and

H2S • Dry Process-Much Easier to Operate • Modular Construction in Shipyards • +/- 65,000 Tons of Modules

28

Regulatory

29

Primary State and Federal Organizations

30

State of Alaska

• Natural Resources • Environmental Conservation • Fish and Game • Transportation and Public Facilities • Labor and Workforce Development • Public Safety • Commerce, Community and

Economic Development – Regulatory Commission

• Health and Social Services • University of Alaska • Alaska Railroad • Mental Health Trust

Federal Government

• Defense ‒ Corps of Engineers

• Interior – Bureau of Land Management – National Park Service – Fish and Wildlife Service – Bureau of Indian Affairs

• Transportation – Pipeline and Hazardous Material Safety Admin.

• Homeland Security – Transportation Security Administration – US Coast Guard

• Environmental Protection Agency • National Oceanic and Atmospheric Administration

– National Marine Fisheries Service

Federal Action - Supplemental Environmental Impact Statement

• Proposed Schedule • Initiation 3rd Qtr 2014 • Completion 2nd Qtr 2015

• Schedule Impact Issues • Final Alignment - Assumed December 31, 2013 • Significant Project Changes (Purpose and Need) • PHMSA Special Permit – Included in the SEIS • Sec.106 Cultural Resource/Programmatic Agreement • ANILCA Title XI

31

Federal Action BLM Grant of Right-of-Way

• Right-of-Way application is still open • Record of Decision (ROD) was not finalized • Responsibility now resides with the Office of Pipeline

Monitoring • AGDC will continue to work with BLM to develop the

grant with the same stipulations as the State ROW lease • Issuance will be linked to the SEIS and the USACE

Least Environmentally Damaging Practicable Alternative (LEDPA) - 3rd Qtr 2015

32

Federal Action USACE Clean Water Act 404 Permit

• Proposed Schedule • Submit complete 404 application – 3th Q 2014 • Receive the 404 permit – 3th Q 2015

• Schedule Impact Issues

• Alignment changes • Ability to provide detailed land use information and

associated material placement and quantities • West Dock dredging needs – decision timing • Section 106 consultation • Denali Alternative Route– USACE LEDPA and possible

implementation of ANILCA Title XI

33

State Action State Right-of-Way Lease Amendments

34

2013 Amendment • Pipeline Origin • Gas Conditioning Facility • AS 42.08 - Contract Carrier • Lease Covenants • Pipeline Specifications • Right-of-Way width, Construction and Operations 2014 Amendment • Amend the ROW Lease to Reflect Alignment

Modifications – Concurrent with BLM ROW

State Action

Air Quality Permitting Program

Current Efforts

• Michael Baker Jr. and Arctic Solutions supplying minor source permitting needs for construction and permanent sources

• Conformity Determinations

– Emissions inventory for PM 2.5 Fairbanks Non-Attainment Area

– CO Maintenance Plan Review

• Regional Haze – providing information to ADEC for concurrence

• NEPA Support for Supplemental EIS Process

• GCF Major Source Permit

– Assembling available meteorological, ambient and existing source emission data for preliminary background analysis of North Slope

35

Construction and Operations

36

Construction Planning • Project Management Team responsible for leading the

procurement of each major contract including equipment and materials procurement and construction contracts

• Construction Contracting strategies will comply with AGDC/ASAP Policies and Procedures (currently under development and review)

• Construction contracting strategies (may include Lump Sum, T&M and Convertible contracts, etc.) will vary and will be structured to manage risk and obtain competitive cost

• A formal survey of labor and logistics services availability and cost will be conducted prior to tendering bids 37

Construction Planning

• Prepare Construction Execution Plan (CEP) and estimate • Prepare work products in each area • Review TIC Estimate for completeness • Develop plans and schedules • Plan the ordering and delivery of pipeline materials • Prepare CEP and estimate for entire facilities portion

38

Operations Planning

• Operations Plans will cover three major areas: – Facilities – Pipeline – Integration

• Operations planning is preliminary, typical of projects in the FEL 2 stage of project development

• Operations planning resources are currently being identified

39

Contracting

40

Procurement & Contract Administration

Develop and Implement Procurement Strategy: • Pre-construction policies and procedures • Source inspection plan • Expediting plan • Develop shop inspection requirements

41

Procurement & Contract Administration

42

Develop Contract Processes:

• Contractor & subcontractor qualifications • Master Service Agreement (MSA) • Identify & qualify vendors • Develop contract & subcontract terms • Manage all subcontracts

Work ahead

43

Engineering Work Plans • Work plans to support the Class III Pipeline Cost Estimate and Open Season

requirements, as well as continuing activities to support ROW Construction include:

– Pipeline Materials (Mainline Materials, pipe coatings, valves, pigging, …) – Civil Materials Requirements (Access roads, workpads, storage yards, airstrips…) – Civil Material Sites (Identification, Volumes, access, regulatory support…) – Waterways (Identification, scour, bank migration, crossing plans…) – Logistics (Pipe and modules, construction support, fuel…) – ROW GeoHazards (Seismicity, Thaw Settlement, Slope Stability,…) – Owner Costs (personnel, engineering, BOO transition…) – Permanent Operation Facilities (OP Center, Maintenance…) – Field Geotechnical Programs (Boreholes, thermistor, site recons…) – GIS (Mapping, Permit support, Alignment sheets…) – Cost summary – ROW Acquisition

44

FEL 2 Deliverables

• Selected project alternative • Updated economic/financial analysis • Project Execution Plan (PEP) • Risk analysis and risk mitigation • Cost and schedule estimates • Safety, health and environmental reviews

45

Staffing For Project Success

ASAP’s project management team (PMT) must possess enough capabilities to perform the following functions: • Ensure that the design can be constructed and operated • Engage with regulators and stakeholders to ensure that the project

can be constructed • Oversee the project in a fashion to ensure cost, schedule, and

capabilities requirements are met and ensure the corporate investment in the project is sound

The PMT organizational structure is a standard “hard matrix” organization encompassing the three major areas of work: pipeline, gas conditioning plant, and environmental, regulatory, and land (ERL), with supporting help from project support personnel from other support and corporate entities.

46

Project Management Team Staffing Profile

Q4 2013 Q1 2016 Project Management 3 3 Pipeline Engineering 6 21 Facilities Engineering 9 10 ERL 9 35 HSSE 1 3.5 Project Services 8 14 Construction Management 5 16 Interface Management 3 9 Total PMT 44 111.5

FEL-2 FEL-3

47

Issues/Opportunities

58

Issues Ahead

• Fiscal terms • ANILCA Title 11 • Federal regulatory environment • Shippers and buyers

49

Questions

50

This report was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

Alaska Gasline Development Corporation Financial Statements and Required Supplemental Information Year Ended June 30, 2013

ALASKA GASLINE DEVELOPMENT CORPORATION

a component unit of the State of Alaska

TABLE OF CONTENTS PAGE EXHIBITS NUMBER

INDEPENDENT AUDITOR’S REPORT 1-2 MANAGEMENT’S DISCUSSION AND ANALYSIS [MD&A] 3 - 6 BASIC FINANCIAL STATEMENTS:

A Governmental Fund Balance Sheet / Statement of Net Position 7

B Statement of Governmental Fund Revenues, Expenditures and Changes in Fund Balance / Statement of Activities 8

Notes to Financial Statements 9 – 13

REQUIRED SUPPLEMENTAL INFORMATION:

Schedule of Governmental Fund Revenues, Expenditures and Changes in Fund Balance – Budget to Actual 14 Notes to Required Supplemental Information 14 Reconciliation of Budgetary to GAAP Reporting 14

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

1

3601 C Street, Suite 600

Anchorage, AK 99503

Tel: 907‐278‐8878

Fax: 907‐278‐5779

www.bdo.com

Independent Auditor’s Report

To the Board of Directors Alaska Gasline Development Corporation Anchorage, Alaska Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and major fund of Alaska Gasline Development Corporation (the Corporation), a component unit of the State of Alaska, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements. Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

2

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Corporation, as of June 30, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of a Matter As discussed in Note H to the financial statements for fiscal year 2013, the Corporation adopted the provisions of Governmental Accounting Standards Board (GASB) Statement number 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. Our opinion is not modified with respect to this matter. Other Matters Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison on pages 3 through 6 and 14 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Anchorage, Alaska October 31, 2013

ALASKA GASLINE DEVELOPMENT CORPORATION a component unit of the State of Alaska

MANAGEMENT’S DISCUSSION AND ANALYSIS

3

OVERVIEW OF THE FINANCIAL STATEMENTS

This financial report of the Alaska Gasline Development Corporation (“the Corporation”) consists of three sections: Management’s Discussion and Analysis, the Basic Financial Statements and the Schedule of Governmental Fund Revenues, Expenditures & Changes in Fund Balance – Budget to Actual. The basic financial statements include the government-wide presentation, along with the governmental fund presentation and the Notes to Financial Statements. Summarized financial information for the year ended June 30, 2012 is also presented here in the Management’s Discussion and Analysis to facilitate and enhance the understanding of the Corporation’s financial position, and the results of operations for the current fiscal year in comparison to the prior activity.


This section of the Corporation’s annual financial report presents management’s discussion and analysis of the financial position and results of operations at and for the fiscal year ended June 30, 2013. This information is being presented to assist the reader in identifying significant financial issues and to provide additional information regarding the activities of the Corporation. This information should be read in conjunction with the Independent Auditors’ Report, the audited financial statements and accompanying notes.

BASIC FINANCIAL STATEMENTS

The government-wide financial statements of the Corporation, which include the Statement of Net Position (Exhibit A) and the Statement of Activities (Exhibit B), are presented to display information about the Corporation as a whole and are prepared using the economic resources measurement focus and accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows.

The governmental fund financial statements of the Corporation, which include the Governmental Fund Balance Sheet (Exhibit A) and the Statement of Governmental Fund Revenues, Expenditures and Changes in Fund Balances (Exhibit B), are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they become both measurable and available to finance expenditures.

Differences between the government-wide and governmental fund financial statements are reconciled within Exhibits A and B. The adjustments are related to the timing of when expenses are recognized.

The Statement of Net Position (Exhibit A) provides information on the financial health of the Corporation and includes all assets and liabilities. Over time, changes in Net Position may serve as a useful indicator of whether the financial position of the Corporation is improving or deteriorating.

The Statement of Activities (Exhibit B) accounts for all fiscal year revenues, expenses and change in fund balance or Net Position. This statement provides information on whether the Corporation has had all of its costs covered through state contributions for the fiscal year.

The Notes to Financial Statements provide additional information that may enhance or provide for a better understanding of the information in the financial statements.

The Schedule of Governmental Fund Revenues, Expenditures & Changes in Fund Balance – Budget to Actual presents the original and final legal budgets compared to the actual amounts utilized by the Corporation and any variances are shown.



4

ACCOMPLISHMENTS AND PLANS

In FY13, AGDC progressed the planning, construction, and financing of the in-state nature gas pipeline by conducting the following activities:

o Informed project stakeholders of progress by presenting project updates to the State of Alaska and other stakeholder groups. Provided technical information and answers to State of Alaska questions related to HB4 which was passed into law (AS 31.25).

o Filed on October 26, 2012, the ASAP Final Environmental Impact Statement (FEIS) with the

Federal Register which would support the USACE Record of Decision (ROD) and project permitting. The EIS process is being conducted to comply with the National Environmental Policy Act (NEPA).

o Progressed Federal and Private Right of Way (ROW) land status and permitting for the pipeline

route.

o Worked with U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) to define their requirements and answer their questions about the project.

o Progressed conceptual facilities and pipeline engineering needed for an open season or offering

within funding constraints. AGDC awarded the facility design contract on February 3, 2013 to Fluor / Worley Parsons (joint venture Arctic Solutions).

o Conducted planning and field work to survey, study and collect geotechnical (borehole),

hydrological/stream, cultural and wetlands data and information along the Right of Way to support pipeline design and project permitting.

In FY14, AGDC plans to advance the development, financing, construction and operation of in-state natural gas pipelines and other transportation systems to deliver natural gas and other non-oil hydrocarbon products for in-state use at the lowest possible cost by conducting the following activities:

o Inform project stakeholders of progress.

o Pursue partners and customers from the integrated natural gas industry.

o Progress facilities and pipeline engineering towards a Class III cost estimate to support an open season tariff estimate.

o Conduct planning and field work to survey, study and collect geotechnical (borehole),

hydrological/stream, cultural and wetlands data and information along the Right of Way to support pipeline design and project permitting.



5

FINANCIAL HIGHLIGHTS

Government-Fund Assets are $21.2 million, Liabilities are $4.5 million and the fund balance is $16.7 million. Revenue is $32.8 million in FY13, $14.4 million more than the $18.3 million in FY12. Expenditures are $16.3 million, $1.8 million less than the $18.1 million in FY12. Government-Wide Assets are $21.7 million, Liabilities are $4.6 million and Net Position is $17.2 million. Net Position increased $16.3 million due to SB 18 re-appropriation funding, depreciation of equipment and prepayment of expenses. Revenue increased $14.5 million to $32.8 million in FY13 from $18.4 million in FY12. Expenses decreased $1.0 million to $16.5 million in FY13 from $17.5 million in FY12. Budgetary Basis The Alaska Legislature appropriated the following amounts to the In-state natural gas pipeline fund in AGDC and AGDC incurred the following budgetary expenditures:

$ in thousand

FY12 FY13 Variance % Variance FY12 FY13 Variance % VarianceAssets 3,365 21,154 17,789 529% 4,060 21,742 17,682 436%Liabilities 3,161 4,487 1,326 42% 3,211 4,558 1,347 42%Fund Balance / Net Position 204 16,667 16,463 849 17,184 16,335

Revenue 18,338 32,781 14,443 79% 18,356 32,803 14,447 79%Expenditures / Expenses 18,134 16,318 (1,816) -10% 17,507 16,468 (1,039) -6%Position 204 16,463 16,259 849 16,335 15,486

Governmental Fund Government-Wide

$ in thousand Appropriation

Budgetary Basis

Expenditures Variance

FY14 355,000 - 355,000

FY13 21,000 11,089 9,911

FY12 28,200 21,631 6,569 FY11 15,640 15,640 - Total In-state natural gas pipeline fund 419,840 48,360 371,480

Notes:

FY14 - The $355 million In-state natural gas pipeline fund appropriation includes $330 million for Alaska Gasline Development

Corporation and $25 million for other State of Alaska Agencies.

FY14 expenditures are unknown at this time. The budget for FY14 expenditures is $72.6 million.

Effective June 30, 2013, AGDC’s FY12 and FY13 unexpended and unobligated appropriation balance of $16.5 million

(FY12 $6.6 million and FY13 $9.9 million) has been re-appropriated to the In-state natural gas pipeline fund (AS 31.25.100)

in the AGDC corporation following SB 18.

FY14 including FY12 and FY13 reappropiated balances may be carried forward for five years as capital funding.

FY12 includes $21 million appropriation and $7.2 million supplemental appropriation.



6

On April 13, 2013, the 28th Alaska Legislature passed SCS CSSSHB 4 (FIN), and the Governor signed the legislation into law (AS 31.25) on May 21, 2013. The State of Alaska appropriated $355 million for FY14 to fund the In-state natural gas pipeline fund for the purposes of the advancement, development, financing, construction and operation of in-state natural gas pipelines and other transportation systems to deliver natural gas and other non-oil hydrocarbon products for in-state use at the lowest possible cost.

CONTACTING AGDC’S FINANCIAL MANAGEMENT

This financial report is designed to provide a general overview of the Corporation’s finances and to show the Corporation’s accountability for the money it receives during the periods reported. If you have questions about this report or need additional financial information, please visit the Corporation’s web site http://www.agdc.us/.

ALASKA GASLINE DEVELOPMENT CORPORATION Exhibit A

(A Component Unit of the State of Alaska)

Governmental Fund Balance Sheet / Statement of Net Position

As of June 30, 2013

(in thousands of dollars)

Governmental

Fund Statement of

Balance Sheet Adjustments* Net Position

ASSETS

Prepaid Expenses 187$ -$ 187$

Due from State of Alaska 20,967 71 21,038

Equipment, Net of Depreciation - 517 517

Total Assets 21,154$ 588$ 21,742$

LIABILITIES

Accrued payables 3,780$ -$ 3,780$

Accrued Compensated Absences - 71 71

Due to Alaska Housing Finance Corporation 707 - 707

Total Liabilities 4,487$ 71$ 4,558$

FUND BALANCES

Nonspendable 187$

Assigned 12,722

Unassigned 3,758

Total Fund balance 16,667

Total Liabilities and Fund Balance 21,154$

Net Position

Total Net Position 517$ 17,184$

*Adjustments:

71$

517

(71)

Total Adjustments to the Governmental Fund Balance Sheet 517$

See accompanying notes to the financial statements.

Amounts reported for governmental activities in the Statement of Net Position are

different because:

Governmental funds don't recognize accrued compensated absences as payable

using current financial resources.

Governmental funds don't accrue Program revenue that isn't collectable within 60

days of year end - reimbursement for compensated absences.

Governmental funds don't recognize General Fixed Assets as current financial

resources.

7

ALASKA GASLINE DEVELOPMENT CORPORATION Exhibit B

(A Component Unit of the State of Alaska)

Statement of Governmental Fund Revenues, Expenditures & Changes in Fund Balance / Statement of Activities

For the Year Ended June, 30, 2013

(in thousands of dollars)

Governmental

Fund

Income Statement

Statement Adjustments* of Activities

REVENUES

Revenues from the State of Alaska 16,161$ 22$ 16,183$

SB18 re-appropriation from the State of Alaska 16,480 - 16,480

Retirement Funding State of Alaska 140 - 140

Total Revenues 32,781 22 32,803

EXPENDITURES / EXPENSES

Contractual Services 13,845 13,845

Personnel 1,570 22 1,592

Office and Supplies 425 (44) 381

Travel 242 - 242

Retirement Funding State of Alaska 140 - 140

Depreciation - 172 172

Insurance 50 - 50

Other Services 42 - 42

Advertising 4 4

Total Expenditures / Expenses 16,318 150 16,468

Excess (Deficiency) of Revenues Over Expenditures / Expenses 16,463 (128) 16,335

Net change in fund balance / Change in Net Position 16,463 (128) 16,335

FUND BALANCE / Net Position

Beginning of Year Balance 204 645 849

End of year balance 16,667$ 517$ 17,184$

*Adjustments:

Governmental funds don't accrue Program revenue that isn't

collectable within 60 day of year end - reimbursement for

compensated absences. 22$

Governmental funds don't recognize accrued compensated

absences as an expenditure. (22)

Governmental funds don't recognize General Fixed Assets as current

financial resources. 44

Governmental funds don't recognize General Fixed Assets as current

financial resources. (172)

Change in Net Position of governmental activities (128)$

See accompanying notes to the financial statements.

Amounts reported for governmental activities in the Statement of Activities

are different because:

8


Notes to Financial Statements

9

FOOTNOTE INDEX

NOTE DESCRIPTION PAGE

A Alaska Gasline Development Corporation 10

B Summary of Significant Accounting Policies 10

C Related Party Transactions 11

D Assets and Liabilities 11

E Long Term Liabilities 11

F Pension and Post Employment Health Care 11 - 13

G Other Commitments and Contingencies 13

H New Accounting Pronouncement 13



10

FOR THE YEAR ENDED JUNE 30, 2013

Note A: The Alaska Gasline Development Corporation

The Alaska Gasline Development Corporation (AGDC) is a public corporation of the State in the Department of Commerce, Community and Economic Development (DCCED) but with a separate and independent legal existence (AS 31.25). The 2013 legislation SCS CSSSHB 4 (FIN) was signed into State of Alaska law (AS 31.25) on May 21, 2013 and continued the existence of AGDC but changed it from a wholly-owned subsidiary of Alaska Housing Finance Corporation (AHFC) (AS 18-56-086) into an independent public corporation of the State of Alaska located for administrative purposes in the DCCCED, but having legal existence independent of and separate from the State. AGDC’s purpose is to advance the planning, constructing, financing and operations of in-state natural gas pipeline projects or other transportation systems to deliver natural gas and other non-oil hydrocarbon products available to Fairbanks, the South-central region of the state, and other communities in the state at the lowest rates possible.

AGDC was incorporated on May 14, 2010, under the Alaska Nonprofit Corporation Act. AGDC is legally independent and separate from DCCED and there is no financial accountability between AGDC and DCCED. AGDC is authorized to borrow money and issue bonds on its own behalf to provide sufficient funds for carrying out its purpose.

AGDC is a component unit of the State of Alaska (State) and is a government instrumentality of the State of Alaska. On September 13, 2013, the Governor appointed AGDC’s new board of directors which is comprised of five public members and two individuals designated by the Governor that is each the head of a principal department of the State. The Legislature appropriates funds to AGDC to fund its purpose.

The in-state natural gas pipeline fund was established in the corporation and consists of money appropriated to it (AS 31.25.100). Effective June 30, 2013, AGDC’s FY12 and FY13 unexpended and unobligated appropriation balance of $16.5 million (FY12 $6.6 million and FY13 $9.9 million) has been re-appropriated to the In-state natural gas pipeline fund in the AGDC corporation following SB 18.

NOTE B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation AGDC is a single purpose governmental fund and has elected to show a single combining presentation of AGDC’s annual financial statements showing the Government-wide and Fund financial statements as Exhibit A – Governmental Fund Balance Sheet / Statement of Net position and Exhibit B Statement of Governmental Fund Revenues, Expenditures and Changes in Fund Balance / Statement of Activities. The financial statements have been prepared in conformity with generally accepted accounting principles, including all applicable Governmental Accounting Standards Board (GASB) pronouncements.

Government-wide and Governmental Fund Financial Statements The Statement of Net position and the Statement of Activities report information on all of the activities of AGDC. The Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balances are provided for governmental funds.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation The Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

Governmental Fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.

Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, AGDC considers revenues to be available if they are collected or contributed within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.



11

NOTE C: RELATED PARTY TRANSACTIONS

AGDC utilizes certain AHFC administrative and support services and products such as general commercial liability insurance and risk management, employee medical plans, accounting and financial systems and treasury, IS equipment and software, contract support and other administrative services.

The following amounts were owed, paid or received by AHFC on behalf of AGDC in FY13.

NOTE D: ASSETS AND LIABILITIES

Due from State of Alaska The outstanding balance is for reimbursement of payments made by AHFC to venders on behalf of AGDC that have not been yet been reimbursed by the State of Alaska and the SB 18 re-appropriation that was funded effective June 30, 2013.

Due to Alaska Housing Finance Corporation AGDC utilizes AHFC’s cash disbursement system to pay for costs incurred. As a result the outstanding balance is the net result of payments made by AHFC to vendors on behalf of AGDC and the periodic reimbursements from the State of Alaska for AGDC’s vendor costs.

NOTE E: LONG TERM LIABILITIES The activity for the year ended June 30, 2013 is summarized in the following schedule (in thousands):

June 30, June 30, Due Within 2012 Additions Reductions 2013 One Year

Compensated absences 50$ 105$ (84)$ 71$ 63$

NOTE F: PENSION AND POST EMPLOYMENT HEALTH CARE

Plan Description As of June 30, 2013, all regular employees of the Corporation who work more than fifteen hours per week participate in the Alaska Public Employees’ Retirement System (PERS). PERS administers the State of Alaska Public Employees’ Retirement System Defined Benefit Retirement Plan which includes both pension and post employment healthcare plans for all employees hired prior to July 1, 2006. The defined benefit plan was an agent multiple-employer, statewide plan until July 1, 2008 when Senate Bill 125 converted the plan to a multiple-employer cost-sharing plan. PERS also administers the State of Alaska Public Employees’ Retirement System Defined Contribution Retirement Plan which includes both pension and post employment healthcare plans for all employees hired on or after July 1, 2006.

PERS is administered by the State of Alaska. Benefits and contribution provisions are established by Chapter 35 of Alaska Statute Title 39, and may be amended only by State Legislature. Amendments do not affect existing employees. A publicly available financial report that includes financial statements and required supplementary information is issued annually by PERS. That report may be obtained by writing to State of Alaska, Department of Administration, Division of Retirement and Benefits, P.O. Box 110203, Juneau, Alaska 99811-0202.

Due to AHFC as of 6/30/12 407

Payments to Vendors and payroll 15,291

Received from State of Alaska (15,024)

AGDC Insurance 33

Due to AHFC as of 6/30/13 707



12

Defined Benefit Plans (Employees hired prior to July 1, 2006): Employees hired prior to July 1, 1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 55 or early retirement age 50. The normal pension benefit is equal to 2% of the member’s three-year highest average monthly compensation for the first ten years of service and for all service prior to July 1, 1986, 2¼% for the second ten years of service and 2½% for all remaining years of service. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. The plan pays the retiree medical plan premium and also provides death and disability benefits.

Employees hired after June 30, 1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 60 or early retirement age 55. The normal pension benefit is equal to 2% of the member’s three-year highest average monthly compensation for the first ten years of service, 2¼% for the second ten years of service and 2½% for all remaining years of service. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. Also the plan does not pay the retiree medical plan premium for retirees under the age of 60 unless the retiree has 30 years of credited service. The employee may elect to pay the full premium cost for medical coverage.

Employees hired after June 30, 1996 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 60 or early retirement age 55. The normal pension benefit is equal to 2% of the member’s five-year highest average monthly compensation for the first ten years of service, 2¼% for the second ten years of service and 2½% for all remaining years of service. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. The plan does not pay the retiree medical plan premium for retirees with less than 10 years of service at age 60. The employee may elect to pay the full premium cost for medical coverage.

Defined Contribution Plan (Employees hired on or after July 1, 2006): There is no retirement age set, however taxes and penalties may apply if withdrawn prior to age 59 ½. Retirement benefits are equal to the Defined Contribution account balance plus interest. The employee may direct the investment of the account if so desired. The account balance is 100% of the employees contribution plus 25% of the Corporation’s contribution after two years of service, 50% of the Corporation’s contribution after three years of service, 75% of the Corporation’s contribution after four years of service, and 100% of the Corporation’s contribution after 5 years of service. The plan pays a portion of the retiree medical plan premium if the retiree retires directly from the plan and is eligible for Medicare. The portion of premium paid by the plan is determined by years of service. Disability benefits are also provided.

Funding Policy

Defined Benefit Plans: Under State law, covered employees are required to contribute 6¾% of their annual covered salary to the pension plan and are not required to contribute to the Post Employment Healthcare Plan.

Under State law the Corporation is required to contribute 22% of annual covered salary. For the fiscal year 2013, 9.67% of covered salary is for the pension plan and 12.33% of covered salary is for the Post Employment Healthcare Plan.

Under AS39.35.255, the difference between the actuarial required contribution of 35.84% for the fiscal year 2013 and the employer rate of 22% will be funded by the State.

The State contribution to the pension plan for the Corporation for the twelve months ended June 30, 2013 was $48,183.

The Corporation’s contributions to the pension plan for the twelve months ended June 30, 2013 and June 30, 2012 was $79,838 and $53,867 respectively.

The State contribution to the post employment healthcare plan for the Corporation for the twelve months ended June 30, 2013 was $61,497.



13

The Corporation’s contributions to the post employment healthcare plan for the twelve months ended June 30, 2013 and June 30, 2012 was $101,799 and $65,599 respectively.

Defined Contribution Plans: Under State law, covered employees are required to contribute 8% of their annual covered salary. For the fiscal year 2013, the Corporation is required to contribute 5.14% of the annual covered salary to the pension plan.

Under State law, covered employees are not required to contribute to the post employment healthcare plan. For the fiscal year 2013, the Corporation is required to contribute 0.48% of the annual covered salary plus an annual flat dollar amount of $1,848.43 for each covered employee.

If the total amount that the Corporation has contributed for the defined contribution pension and post employment healthcare plans is less that 22% of covered payroll, the Corporation must pay that additional amount. For the year ended June 30, 2013, the Corporation paid additional contributions of $24,328. The contributions to the pension plan for the year ended June 30, 2013 by the employees was $14,141, by the Corporation was $9,914 and by the State was $10,226. The contributions to the post employment healthcare plan for the year ended June 30, 2013 by the Corporation was $4,631 and by the State was $13,051.

NOTE G: OTHER COMMITMENTS AND CONTINGENCIES

The Corporation entered into an agreement for project information where $4,657,856 would become due and payable when (a) the State awards permits, work product, and other results of the North Slope to Tidewater Preliminary Development Project to a Qualified Builder (other than a public corporation owned by the State). Or (b) the State determines it will construct the North Slope to Tidewater pipeline itself, either through a public corporation owned by the State or otherwise, and (I) the Legislature of the State of Alaska appropriates some or all of the funding for the North Slope to Tidewater Development and Construction Expenses, or (II) bonds are issued by the State or a public corporation owned by the State intended to finance some or all of the North Slope to Tidewater Development and Construction Expenses.

NOTE H: NEW ACCOUNTING PRONOUNCEMENTS

For the Year Ended June 30, 2013, the Corporation adopted the provisions of GASB Statement Number 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This statement resulted in a change to the government’s presentation of government-wide statement from a traditional “Balance Sheet” format to a new “Statement of Net Position” format which segregated deferred inflows and deferred outflows from assets and liabilities respectively.

Actual Variance With

Original Final Amounts on Final Budget

Budgeted Budgeted Budgetory Positive

Amounts Amounts Basis (Negative)

REVENUES

Revenues from the State of Alaska 32,707$ 32,707$ 29,070$ 3,637$

Total Revenues 32,707 32,707 29,070 3,637

EXPENDITURES

Contractual Services 29,996 29,996 26,676 3,320

Personnel 1,766 1,766 1,570 196

Office and Supplies 566 566 503 63

Travel 272 272 242 30

Retirement Funding State of Alaska - - - -

Depreciation - - - -

Insurance 56 56 50 6

Other Services 47 47 42 5

Advertising 4 4 4 -

Total Expenditures 32,707 32,707 29,087 3,620

Excess of Revenues Over Expenditures -$ -$ (17)$ 17$

Net change in fund balance (17)

FUND BALANCE

Beginning of Year Balance 204

End of year balance 187$

Notes to Required Supplementary Information:

Reconciliation of Budgetary to GAAP reporting:

Budgetary Basis - Total Revenue 29,070$

SB 18 re-appropriation 16,480

140

(187)

Encumbrances (12,722) Governmental Fund Income Statement - Total Revenue 32,781$

Budgetary Basis - Expenditures 29,087$

140

(187)

(12,722)

Governmental Fund Income Statement - Expenditures 16,318$

187$

SB 18 re-appropriation 16,480 Governmental Fund Balance 16,667$

Retirement funding made by State of Alaska on-behalf of AGDC

Prepaid items

Retirement funding made by State of Alaska on-behalf of AGDC

Prepaid items

The legislature's legal authorization for AGDC to incur obligations is enacted on a basis inconsistent with generally accepted

accounting principles (GAAP). This schedule presents comparisons of the original and final adopted budget with actual data on

a budgetary basis. Encumbrances are included for total authorized expenditures, although for GAAP purposes they are

excluded. The actual data in this schedule is modified accrual basis of accounting with encumbrances.

Budgetary Basis Fund Balance

ALASKA GASLINE DEVELOPMENT CORPORATION

A Component Unit of the State of Alaska

Required Supplementary Information

Basis of Budgeting

Schedule of Governmental Fund Revenues, Expenditures & Changes in Fund Balance - Budget to Actual

For the Year Ended June 30, 2013

(in thousands)

Encumbrances

14

ASAP Comprehensive Project Update Telephonic Information Session with BOD

0

• AGDC audited financial statements are available on public website.

• http://asapgas.agdc.us/reports.html

AGDC Project to Date Expenditures October 2013 $MM

FY11 13.7 FY12 17.5 FY13 16.5 FY14 YTD 15.0 Fixed Assets 0.7 Total Spend 63.4 Note: Excludes expenditures prior to AGDC.

http://asapgas.agdc.us/reports.html


1

Alaska Gasline Development Corporation (AGDC) HB4 FEL 2 - 3 Funding Request and FY14 Latest Estimate

$MM FY14 FY15 FY16 FY16+ Total

Total AGDC 85 138 107 330

Other SOA Agencies 2 3 5 16 25 (DOL, DNR, DEC, DOT&PF)

Total HB4 Fiscal Notes 87 141 111 16 355

Prior Year Re-Appropiation 16.5 16.5

FY14 + Funding 87 141 111 32 372

October Latest Estimate (LE) 62


2

Alaska Gasline Development Corporation (AGDC) HB4 FEL 2 - 3 Funding Request $MM

FY14 FY15 FY16 FY16+ Total

Executive and Support: Executive 2 2 2 5 Commercial 3 5 4 13 External Affairs 4 3 3 10 Legal 2 3 2 7 Finance 2 1 1 5 Administrative Services 4 3 3 10

Data Management & IT 7 5 6 18 Total Executive and Support 24 22 21 67

Project Management: Project Management 11 20 14 45 Pipeline 16 31 22 69 Facilities 25 47 34 106 ERL 8 15 11 35 Interface 1 2 2 5 HSE 0 1 0 1

Total Project Management 62 116 83 261

Rounded for Fiscal Note 2 2

Total AGDC 85 138 107 330


3

• AGDC’s FY15 Proposed Budget Process and Schedule.

- March 2014 » AGDC recasts FY15 plans based upon

latest information (actuals), new developments and plans. • AGDC conducts internal reviews and refinement. • Plans are made at a more granular or detailed level.

- April - May 2014 » AGDC presents to BOD for review and

approval.

AMENDED AND RESTATED BYLAWS OF

THE ALASKA GASLINE DEVELOPMENT CORPORATION

ARTICLE I GENERAL

Section 1. Creation. The Alaska Gasline Development Corporation (“Corporation”) is a public corporation of the State of Alaska under AS 31.25.

Section 2. Adoption of Bylaws. The Corporation has adopted these Amended and Restated Bylaws under the authority of AS 31.25.080(a)(14).

Section 3. Conflict with Statutes and Regulations. If any provision of these bylaws conflict with any provisions of AS 31.25 or with regulations adopted by the Corporation under AS 31.25, the provisions of AS 31.25 and the regulations adopted by the Corporation under AS 31.25 shall prevail over the conflicting provisions of these bylaws.

ARTICLE II OFFICES

Section 1. Principal Office. The principal office of the Corporation shall be in the State of Alaska at the location that the Board of Directors of the Corporation shall determine from time to time.

Section 2. Other Offices. The Corporation also may have offices at such other places as the Board of Directors of the Corporation may from time to time determine or as the business of the Corporation may require, and such offices may be inside or outside the State of Alaska.

ARTICLE III BOARD OF DIRECTORS

Section 1. Board of Directors. The business, affairs, and property of the Corporation shall be managed by the Board of Directors described in AS 31.25.020. In these bylaws, “Board” means the Board of Directors described in AS 31.25.020, and “Director” means a member of the Board.

Section 2. Number, Tenure and Qualifications. The number, tenure and qualifications of Directors shall be as provided in AS 31.25.020.

Section 3. Committees and Subcommittees.

(a) The Board may, by resolution, establish such committees and subcommittees as the Board considers necessary or beneficial to the conduct of the business of the Corporation. The Board may also establish or permit the establishment of such committees and subcommittees by a resolution approving or adopting policies, handbooks, or other documents that include provisions for the establishment of such committees or subcommittees; provided, however, that

AMENDED AND RESTATED BYLAWS OF THE ALASKA GASLINE DEVELOPMENT CORPORATION Page 2 of 7

the resolution approving or adopting such policies, handbooks, or other documents shall specifically acknowledge that it is authorizing the creation of committees or subcommittees as permitted by this Section. A resolution described in this subsection shall establish, or provide for the establishment of, the membership of such committees and subcommittees. The membership of a committee or subcommittee authorized by this subsection shall include at least one Director and, in addition to the Director member or members, may include one or more employees and contractors of the Corporation. The Board, by resolution, may delegate authority to a committee or subcommittee authorized by this subsection as the Board considers appropriate, subject to the limitations set forth in this Section.

(b) The approval of items described in AS 31.25.030(e) is expressly reserved to the Board of Directors, as a whole, and may not be delegated to any committee or subcommittee.

Section 4. Meetings; Annual Meeting.

(a) Regular or special meetings of the Board shall be held at such place as may be designated from time to time by the Board. Meetings of the Board may be called by the Chair, the Secretary, or at least three Directors.

(b) Meetings of any committee or subcommittee established pursuant to Section 3 of this Article III may be called by the chair of that committee or subcommittee or by at least two members of that committee or subcommittee, unless the committee or subcommittee establishes different rules for this purpose.

(c) The Board shall conduct the annual meeting of the Corporation in July of each year; provided, however, that the Board may, by adoption of a motion, select a different month for the annual meeting.

Section 5. Quorums and Vote Requirements.

(a) A majority of the Directors at a meeting of the Board constitutes a quorum for the transaction of business. If a quorum initially is not present at any meeting of the Board, the Directors present at that meeting may recess the meeting until a quorum is present or may cancel the meeting, in either case without notice other than announcement at the meeting.

(b) Except as may be otherwise specifically provided by AS 31.25 or these Bylaws, the act of at least a majority of the Directors present at any meeting of the Board at which a quorum is present will be the act of the Board.

(c) A majority of the members of any committee or subcommittee established pursuant to Section 3 of this Article III constitutes a quorum for the transaction of business. If a quorum initially is not present at any meeting of a committee or subcommittee, the members present at that meeting may recess the meeting until a quorum is present or may cancel the meeting, in either case without notice other than announcement at the meeting.

(d) The act of a majority of the members of a committee or subcommittee present at any meeting of that committee or subcommittee at which a quorum is present will be the act of


that committee or subcommittee, except as may be otherwise specifically provided by these bylaws.

Section 6. Compensation. The public members of the Board receive compensation and reimbursement for expenses as provided in AS 31.25.020(d).

ARTICLE IV NOTICES AND WAIVERS

Section 1. Form and Content of Notices. (a) Whenever, under the provisions of statutes or of these bylaws, notice shall be required to be given to any Director it shall be given in writing, by mail or by electronic mail, addressed to such Director at such address as shall appear on the records of the Corporation. If by mail, it shall be sent with postage thereon prepaid, and such notice by mail shall be deemed to be given at the time when deposited in the United States mail. If by email, such notice shall be deemed to be given at the time sent

(b) Except as otherwise permitted by AS 31.25.030(d), the Corporation shall provide public notice of each meeting of the Board. The notice shall state the place, day, and hour of the meeting. The Corporation shall give the public notice not less than 5 or more than 60 days before the date of the meeting. The Corporation shall publish the notice on the State of Alaska’s Online Public Notice System and, in addition, may publish the notice in such newspapers and in such other manner as the Corporation may determine to be appropriate from time to time.

Section 2. Electronic Media. The Board may conduct meetings by electronic media in accordance with AS 31.25.030(b). “Electronic media” in this Section means telephone calls, conference telephone calls, web meetings, and other methods for participation other than in person.

Section 3. Waivers. Whenever any notice is required to be given under the provisions of statutes or these bylaws, a waiver of the notice in writing, signed by the person entitled to the notice either before or after the time stated in the notice, will be deemed equivalent to the giving of that notice. Attendance at a meeting by a Director, either in person or by electronic media, shall constitute a waiver of notice of such meeting, except where an appearance shall be made for the express purpose of objecting to the meeting as not lawfully called or convened.

ARTICLE V OFFICERS

Section 1. Board Officers. The officers of the Board shall be a Chair, a Secretary and a Treasurer. The Board may establish additional Board officer positions by resolution. The Board shall select Board officers from among its membership at each annual meeting described in Section 4(c) of Article III of these bylaws. Each Board officer shall serve at the pleasure of the Board. The Board shall elect a successor from its membership to fill a vacancy in a Board office for the unexpired term. Any two Board officer positions may be held by the same person except the positions of Chair and Secretary.

Section 2. Chair. The Chair, when present, presides at all meetings of the Board. In the absence of the Chair, the Secretary shall preside at meetings of the Board, unless the Board


determines by motion that a different Board officer shall preside. The Chair shall have power to determine all questions relating to the conduct of the meeting of the Board, including recognizing motions of Directors and establishing the priorities of motions with respect to one another.

Section 3. Secretary. The Secretary shall be under the supervision of the Board and shall have authority to affix the corporate seal to any instrument requiring a seal, and, when so affixed, it shall be attested by the Secretary’s signature or by the signature of an Assistant Secretary, if any. The Secretary shall have the power to certify as to the proceedings of and actions taken by the Board.

Section 4. Treasurer. The Treasurer shall be under the supervision of the Board. The Treasurer shall keep or cause to be kept accounts of all of the monies of the Corporation received and disbursed, and, subject to direction of the Board, shall safely keep or cause to be kept all securities and valuables of the Corporation. The Treasurer shall, from time to time, make such reports to the Board and Executive Director as may be required and shall perform such other duties as may be prescribed by the Chair. In the absence of a Treasurer, the duties of the Treasurer shall be discharged by the Secretary, or such other Board officer as the Board shall designate.

Section 5. Executive Director and Other Corporation Officers. The Corporation shall employ an Executive Director, who may not be a member of the Board. The Executive Director shall be appointed by the Board and serves at the pleasure of the Board. The Executive Director shall be the principal executive officer of the Corporation, and shall, subject to the direction of the Board, supervise and control the business and affairs of the Corporation and perform such other duties as the Board may assign from time to time. The Executive Director may sign, and may delegate to any other Corporation officer the ability to sign, any document on behalf of the Corporation as authorized by either the Board or the regulations of the Corporation. The Executive Director may create additional Corporation officer positions, including a Deputy Executive Director, one or more Deputy Directors, and such additional officer positions as the Executive Director may determine to be appropriate and in the interest of the Corporation.

Section 6. Administrative Assistant. The Executive Director shall employ an administrative assistant to assist the Executive Director and the Board. The administrative assistant shall record, or cause to be recorded, all votes and all proceedings of the Board, and shall maintain minutes of such, in books of the Corporation to be kept for that purpose. The administrative assistant shall make all such records and books available to the Secretary, and shall otherwise assist the Secretary, as needed for the exercise and fulfillment of the Secretary’s powers and duties under Section 3 of this Article V. The administrative assistant shall give, or cause to be given, notice of all meetings of the Board, and shall perform such other duties as shall be prescribed by the Executive Director or the Chair.

Section 7. Employment of Personnel. The Executive Director may hire employees of the Corporation and engage professional and technical advisors under contract with the Corporation. The Board shall prescribe the duties and compensation of Corporation personnel, including the Executive Director.


ARTICLE VI STANDARD OF CARE; INSURANCE

Section 1. Institutional Investor Duty. Except as shall otherwise be provided in agreements entered into by the Corporation, the management and investment of assets of the Corporation, through its officers and directors shall be done with the care, skill, prudence and diligence and under the circumstances then prevailing that an institutional investor would use in the conduct of an enterprise of a like character and with like aims.

Section 2. Insurance. At the discretion of the Board, the Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee, or agent of the Corporation against any liability asserted against that person and incurred by that person in any such capacity, or arising out of that status.

Section 3. Additional Rights. The provisions of this Article VI shall not limit or exclude any other rights to which any person may be entitled under law or contract.

ARTICLE VII ADMINISTRATIVE STRUCTURE

Section 1. Office Space, Personal Property. The Executive Director or his or her designee may lease office space and acquire or lease equipment and other personal property necessary for the day-to-day operations and management of the Corporation.

Section 2. Employee Rules, Procedures, and Benefits; Delegation of Authority.

(a) The Corporation shall adopt and revise from time to time such employee rules and procedures as the Corporation considers appropriate and desirable. The Board shall review and approve all such rules and procedures.

(b) The rules and procedures described in (a) of this Section shall govern the handling of employee matters by the Corporation. In case of a conflict between such rules and procedures and either these bylaws, these bylaws shall govern.

(c) The Corporation shall adopt and revise from time to time such employee benefits package as the Corporation considers appropriate and desirable. The Board shall review and approve all such employee benefits packages.

(d) The Corporation shall adopt and revise from time to time policies relating to the delegation of authority of the Executive Director and other delegations of authority as appropriate. The Board shall review and approve all such delegation of authority policies.

(e) The employee rules and procedures, the employee benefits package, and the delegation of authority policies in place as of the date of adoption of these bylaws set forth below shall remain in place and in effect until, and except to the extent that, they are replaced as provided in (a) – (d) of this Section.


ARTICLE VIII GENERAL PROVISIONS

Section 1. Execution of Contracts. Except as authorized pursuant to these bylaws, no person shall have the power to enter into any contract or to execute and deliver any instrument for and on behalf of the Corporation, nor shall any person, except as authorized pursuant to these bylaws, have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable in any amount for any purpose.

Section 2. Loans. No loans shall be contracted on behalf of the Corporation except as authorized by these bylaws or as specifically authorized by the Board.

Section 3. Checks, Drafts. All checks, drafts, or other orders for payment of money, including all notes or other evidences of indebtedness, issued in the name of or payable by the Corporation, shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by the Executive Director.

Section 4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Executive Director may select.

Section 5. Assignment and Transfer of Stocks, Bonds and Securities. The Chair, the Treasurer, the Secretary, the Executive Director, and each of them, shall have power to assign, or to endorse for transfer, under the corporate seal, and to deliver, any stock, bonds, subscription rights, or other securities, or any beneficial interest in those instruments, held or owned by the Corporation.

Section 6. Conflict of Interest, Code of Ethics. (a) Directors are fully subject to the provisions on conflict of interest as set forth in AS 39.50.010-39.50.200 and shall annually file a statement as required by that law.

(b) Directors are subject to the provisions of the Alaska Executive Branch Ethics Act, AS 39.52.010-39.52.960, and shall comply with the terms thereof.

Section 7. Loans to Officers and Directors. No loans shall be made by the Corporation to any Directors or officers. A Director or officer who assents to or participates in the making of such a loan shall be liable to the Corporation for the amount of the loan, with interest at the prevailing prime interest rate (as determined by the Executive Director or the Chair and notwithstanding the stated interest rate, if any, of the loan) until its repayment. No loan shall be made by the Corporation to any other corporation, firm, association or other proprietary entity in which one or more of the Corporation's Directors or officers are directors or officers or hold a substantial financial interest, except as allowed by law.

Section 8. Fiscal Year. The fiscal year end of the Corporation shall be June 30, or as shall be otherwise fixed by resolution of the Board of Directors.

Section 9. Headings. The headings contained in these Bylaws shall be for convenience only and shall not in any way affect the meaning or interpretation of these Bylaws.


ARTICLE IX AMENDMENT OF BYLAWS

Section 1. Amendment and Repeal. Except as otherwise provided by law, the Board may adopt, alter, amend or repeal these bylaws and adopt new bylaws.

Section 2. Recordation. Whenever action shall be taken to amend or alter these bylaws or to adopt new bylaws, a copy of the amendment, alteration, or new bylaw shall be filed and kept in the minute book with the original bylaws. If any bylaw shall be repealed, the fact of such repeal and the date on which it occurred shall be recorded in the minute book, and a copy of it shall be placed next to the original bylaws.

I, the undersigned, being the Secretary of the Alaska Gasline Development Corporation hereby certify the foregoing to be the bylaws of the Corporation, as adopted by the Board of Directors, on this _____ day of ____________ 2013.

____________________________________ Secretary

AGDC DRAFT GOVERNANCE HANDBOOK

Alaska Gasline Development Corporation

GOVERNANCE HANDBOOK

November 2013

CONTENTS, CONTINUED

Section Page

IV AGDC DRAFT GOVERNANCE HANDBOOK

CONTENTS

Section Page

Tables vii

Figures viii

Acronyms and Abbreviations .......................................................................................................................... ix

1. Organizational Governance and Delegation of Authority ............................................................. 1-1 1.1 Executive Committee ............................................................................................................. 1-1

1.1.1 Membership ............................................................................................................... 1-1 1.1.2 Frequency of Meetings .............................................................................................. 1-2 1.1.3 Decisions ................................................................................................................... 1-2 1.1.4 Duties and Responsibilities ....................................................................................... 1-2 1.1.5 Delegated Authority .................................................................................................. 1-3 1.1.6 Reporting ................................................................................................................... 1-3

1.2 Finance and Audit Committee ................................................................................................ 1-3 1.2.1 Membership ............................................................................................................... 1-3 1.2.2 Frequency of Meetings .............................................................................................. 1-4 1.2.3 Decisions ................................................................................................................... 1-4 1.2.4 Duties and Responsibilities ....................................................................................... 1-4 1.2.5 Delegated Authority .................................................................................................. 1-4 1.2.6 Reporting ................................................................................................................... 1-4

1.3 Procurement and Contracts Committee .................................................................................. 1-4 1.3.1 Membership ............................................................................................................... 1-4 1.3.2 Frequency of Meetings .............................................................................................. 1-5 1.3.3 Decisions ................................................................................................................... 1-5 1.3.4 Duties and Responsibilities ....................................................................................... 1-5 1.3.5 Delegated Authority .................................................................................................. 1-6 1.3.6 Reporting ................................................................................................................... 1-6

2. Policies and Guiding Principles ........................................................................................................ 2-1 2.1 Communications and Media Policy........................................................................................ 2-1

2.1.1 Guiding Principle ...................................................................................................... 2-1 2.1.2 Purpose and Scope .................................................................................................... 2-1 2.1.3 Applicability .............................................................................................................. 2-2 2.1.4 Implementation .......................................................................................................... 2-2

2.2 Confidentiality Policy ............................................................................................................. 2-3 2.2.1 Guiding Principle ...................................................................................................... 2-3 2.2.2 Purpose and Scope .................................................................................................... 2-3 2.2.3 Applicability .............................................................................................................. 2-4 2.2.4 Implementation .......................................................................................................... 2-4

CONTENTS, Continued

Section Page


2.3 Conflict of Interest Policy ...................................................................................................... 2-5 2.3.1 Guiding Principle ...................................................................................................... 2-5 2.3.2 Purpose and Scope .................................................................................................... 2-5 2.3.3 Applicability ............................................................................................................. 2-7 2.3.4 Implementation ......................................................................................................... 2-7

2.4 Ethics and Business Conduct Policy ...................................................................................... 2-8 2.4.1 Guiding principle ...................................................................................................... 2-8 2.4.2 Purpose and scope ..................................................................................................... 2-8 2.4.3 Applicability ............................................................................................................. 2-9 2.4.4 Implementation ......................................................................................................... 2-9

2.5 Financial Policy ................................................................................................................... 2-10 2.5.1 Guiding Principle .................................................................................................... 2-10 2.5.2 Purpose and Scope .................................................................................................. 2-10 2.5.3 Applicability ........................................................................................................... 2-10 2.5.4 Implementation ....................................................................................................... 2-10

2.6 Health, Safety, and Environment Policy .............................................................................. 2-12 2.6.1 Guiding Principle .................................................................................................... 2-12 2.6.2 Purpose and Scope .................................................................................................. 2-12 2.6.3 Applicability ........................................................................................................... 2-12 2.6.4 Implementation ....................................................................................................... 2-12

2.7 Human Resources Policy ..................................................................................................... 2-15 2.7.1 Guiding Principle .................................................................................................... 2-15 2.7.2 Purpose and Scope .................................................................................................. 2-15 2.7.3 Applicability ........................................................................................................... 2-15 2.7.4 Implementation ....................................................................................................... 2-15

2.8 Information Technology Policy ........................................................................................... 2-17 2.8.1 Guiding Principle .................................................................................................... 2-17 2.8.2 Purpose and Scope .................................................................................................. 2-17 2.8.3 Applicability ........................................................................................................... 2-17 2.8.4 Implementation ....................................................................................................... 2-17

2.9 Procurement and Contracting Policy ................................................................................... 2-19 2.9.1 Guiding Principle .................................................................................................... 2-19 2.9.2 Purpose and Scope .................................................................................................. 2-19 2.9.3 Applicability ........................................................................................................... 2-19 2.9.4 Implementation ....................................................................................................... 2-19

2.10 Quality ................................................................................................................................. 2-21 2.10.1 Guiding Principle .................................................................................................... 2-21 2.10.2 Purpose and Scope .................................................................................................. 2-21 2.10.3 Applicability ........................................................................................................... 2-21 2.10.4 Implementation ....................................................................................................... 2-21

2.11 Security Policy ..................................................................................................................... 2-23 2.11.1 Guiding Principle .................................................................................................... 2-23 2.11.2 Purpose and Scope .................................................................................................. 2-23 2.11.3 Applicability ........................................................................................................... 2-23 2.11.4 Implementation ....................................................................................................... 2-23

2.12 Risk Management Policy ..................................................................................................... 2-24 2.12.1 Guiding Principle .................................................................................................... 2-24 2.12.2 Purpose and Scope .................................................................................................. 2-24 2.12.3 Applicability ........................................................................................................... 2-24 2.12.4 Implementation ....................................................................................................... 2-24

2.13 Delegation of Authority Policy ............................................................................................ 2-25

CONTENTS, CONTINUED

Section Page

VI AGDC DRAFT GOVERNANCE HANDBOOK

2.13.1 Guiding Principle .................................................................................................... 2-25 2.13.2 Purpose and Scope .................................................................................................. 2-25 2.13.3 Applicability ............................................................................................................ 2-25 2.13.4 Implementation ........................................................................................................ 2-25

3. Stage Gate Process ............................................................................................................................. 3-1 3.1 Stage Gate Process Description .............................................................................................. 3-2 3.2 Approvals ............................................................................................................................... 3-4 3.3 Approval and Review Authorities .......................................................................................... 3-5 3.4 Standard Gate Review Criteria ............................................................................................... 3-5

3.4.1 Project Initiation and Authorization .......................................................................... 3-5 3.4.2 Project Economics ..................................................................................................... 3-6 3.4.3 Commercial Agreements ........................................................................................... 3-7 3.4.4 Front End Loading Engineering ................................................................................ 3-7 3.4.5 Project Planning, Execution, and Control ............................................................... 3-10 3.4.6 Commissioning and Start-up ................................................................................... 3-14 3.4.7 Project Completion and Close-out .......................................................................... 3-15

CONTENTS, Continued

Section Page


TABLES

Table 1. Approval Interactions ................................................................................................................. 2-25

Table 2. Delegated Authority ................................................................................................................... 2-26

Table 3. Stage Gate Review and Approval Authority ................................................................................ 3-5

Table 4. Project Initiation and Authorization Stage Gates ......................................................................... 3-5

Table 5. Economics Stage Gates ................................................................................................................ 3-6

Table 6. Commercial Agreements Stage Gates .......................................................................................... 3-7

Table 7. Front End Loading Engineering Stage Gates ............................................................................... 3-7

Table 8. Project Planning, Execution, and Control Stage Gates .............................................................. 3-10

Table 9. Commissioning and Start-up Stage Gates .................................................................................. 3-15

Table 10. Project Completion Stage Gates ................................................................................................. 3-15

CONTENTS, CONTINUED

Section Page

VIII AGDC DRAFT GOVERNANCE HANDBOOK

FIGURES

Figure 1. Stage Gate Review and Approvals for the ASAP Project............................................................. 3-3

Figure 2. Stage Gate Review Process ........................................................................................................... 3-4


ACRONYMS AND ABBREVIATIONS

AACE American Association of Cost Estimators (Formerly, now AACE, International)

AFE Authorized Funds for Expenditure

AGDC Alaska Gasline Development Corporation

ASAP Alaska Stand Alone Pipeline

BEP Business Execution Plan

BO Build-Operate

Board Alaska Gasline Development Corporation Board of Directors

BOO Build-Own-Operate

C&SU Commissioning and Start-up

CBS Cost Breakdown Structure

COI Conflict of Interest

ERL Environmental, Regulatory, and Land

FEED Front-End Engineering and Design

FEL Front End Loaded

HR Human Resources

IT Information Technology

KPI Key Performance Indicator

NTE Not to Exceed

P&ID Piping and Instrumentation Diagram

PEP Project Execution Plan

PM Project Manager

PMC Program Management Contractor

PMO Program Management Office

PMT Project Management Team

PSR Project Status Report

RFI Request for Information

TPC Total Project Cost

WBS Work Breakdown Structure

AGDC DRAFT GOVERNANCE HANDBOOK 1-1

1. ORGANIZATIONAL GOVERNANCE AND DELEGATION OF AUTHORITY

This document describes the governance structure needed to successfully deliver Alaska Gasline Development Corporation activities. The focus of the document is to clarify the division of responsibility, delegation of authority, and decision-making process among AGDC, the individual Project Management Teams (PMTs) for AGDC sponsored projects, and other parties supporting AGDC in its endeavors.

Individual projects potentially sponsored by AGDC have such a complexity and scale that it will be impossible for any one person, corporate entity, or committee to be involved in decision making in all aspects and at all levels of AGDC activities. Therefore, governance will need to accomplish the following:

• Delegate authority for decision-making to the appropriate level within AGDC activities

• Maintain control over decisions on key corporate or project issues

• Escalate issues for a decision to be taken at the appropriate level of the management structure

This section describes the corporate approach to organizational governance, as well as oversight assurance and delegation of authority, to clarify the division of responsibilities among AGDC, the AGDC Program Management Office (PMO), individual Project Management Teams (PMTs) and other project participants.

The AGDC PMO, an individual project’s PMT and associated delivery partners are the focal point of the AGDC project delivery model and are tasked with completing facilities in a timely and efficient manner. The key role of the PMO with regard to the individual projects will be one of oversight and governance assurance. This will require the delivery partners to embrace and adopt the governance structure set at the AGDC level, as well as at the individual project level. The PMT for an individual project is responsible to assure that project specific procedures are properly implemented that align with this government handbook. This will be done through contract requirements and administered through each participant’s individual Project Execution Plan (PEP). Performance will be monitored through assurance at the project and AGDC corporate levels that validate performance against corporate, project, and contractual requirements. Effective, well-defined interface between the committees that make up the governance structure and the delivery team is critical to the overall success of the project.

1.1 EXECUTIVE COMMITTEE

1.1.1 Membership

Chair: Chairman of the Board

In the absence of the chair, another member of the Board will act as interim chair. In that person’s absence, the Executive Director will chair the committee.

Members:

• Board Members

• Executive Director

• Chief Financial Officer

• Commercial Manager

1 ORGANIZATIONAL GOVERNANCE AND DELEGATION OF AUTHORITY

1-2 AGDC DRAFT GOVERNANCE HANDBOOK

• AGDC PMO Director

• Key Individual Project Manager(s) (Such as ASAP or future projects)

Members of the committee may also include representatives from other AGDC departments as determined necessary by the committee. It may not be necessary for all members to attend every meeting depending on the agenda.

By Invitation: Others may be invited as necessary to report or provide information on specific issues.

Quorum: Majority of Voting Members present

Frequency of Meetings:

Meetings will be held quarterly or at such intervals as the chair may determine. Working groups may be established by the Executive Committee to consider and address specific issues on its behalf.

1.1.2 Frequency of Meetings

Meetings will be held quarterly, or at such other frequency as determined from time to time by the chair. Working groups may be established by the Executive Committee to consider and address specific issues on its behalf.

1.1.3 Decisions

The members of the committee shall endeavor to determine all decisions unanimously. If this is not achieved, then the majority vote shall determine outcome of decisions.

1.1.4 Duties and Responsibilities

Following are the duties and responsibilities of the Executive Committee:

1. Timely review, approval, and monitoring (as appropriate) of the implementation of AGDC operations and individual projects, including the following components:

a. Strategic planning for the overall enterprise, including the strategic plan and the 3-year plan

b. Overall resource availability to ensure access to a knowledge base and skill set necessary to deliver the project

c. Key leadership recruiting plans and staff need requests and compensation packages agreed for those key positions.

d. Next-tier corporate and project staff recruiting plans and compensation for those positions

e. President’s expense reports to ensure proper oversight of senior personnel expenses

f. Procurement and contracts (and engaging the supply chain), including approval of tariff applications and adjustments to actual costs following completion of an individual project

g. Communications

h. Information Technology (IT) (inclusive of business systems and underlying platforms)

i. Project delivery, inclusive of development, design, construction, testing, commissioning, and handover by target delivery dates

j. Business continuity

k. Risk and change control

l. Finance and audit

m. Environment, Regulatory, and Land (ERL)



n. Health, Safety, Security, and Environment (HSSE), including approval of the overall safety program for individual projects

o. Logistics

p. Insurance

q. Relevant legal requirements

2. Understand, review, and monitor annual operating and delivery plans and budgets, including the following:

a. The relevant delivery teams are responsible for developing and presenting to the Executive Director their operating and delivery plans and budgets and for implementing those plans and budgets. The Executive Committee will provide review and oversight of those budgets.

b. Approval of decisions on the operating and delivery plans and budgets within delegated authority or escalation as appropriate.

3. Developing a delegation strategy to deliver the individual projects while providing sufficient advice and oversight of individual project delivery teams and when requested, on strategic approaches to significant issues.

4. Nominating Executive Committee members. 5. Overseeing effective project governance and assurance process. 6. Considering and interfacing with third parties where required and/or if requested by the delivery team.

1.1.5 Delegated Authority

The Executive Committee will have the delegated authority to carry out, on behalf of AGDC, all matters described herein, including the authority:

1. To review the effectiveness of the following project elements and advise the AGDC Board accordingly: a. Policies

b. Procedures

2. To propose and advise the AGDC Board on and review the following project elements: a. Strategies

b. Significant systems (information management, IT)

3. To approve the following on behalf of the AGDC: a. Corporate and executive authority for decisions encompassed and required by Executive

Committee’s responsibilities to the value specified in any scheme of delegated authority, which is approved by the AGDC Board

b. Adjust overall project baseline cost profiles caused by change and/or risk control valued at over $XXXXXXX

1.1.6 Reporting

If not the same person, the chair of Executive Committee will report to the Chairman of the Board on Executive Committee decisions and provide advice on any material concerns following each meeting. The minutes of Executive Committee meetings will be circulated to all Executive Committee members.

1.2 FINANCE AND AUDIT COMMITTEE

1.2.1 Membership

Chair: Board of Directors Member

In the absence of the chair, the members of Finance and Audit Committee who are present will elect an interim chair from among the AGDC staff present.

Members:



• Other Board Members (as assigned by the Chairman)

• AGDC Chief Financial Officer

• AGDC PMO Director

• AGDC Finance Director

• Individual Project Commercial Manager (such as ASAP Commercial Manager)




Meetings will be held quarterly, or at such other frequency as determined from time to time by the chair. Working groups may be established by the Finance and Audit Committee to consider and address specific issues on its behalf.

1.2.3 Decisions



The Finance and Audit Committee will advise on, assist, make recommendations, and report, as the context requires, to the Board of Directors to facilitate the following:

1. Cooperating and communicating with the Chief Financial Officer and appropriate state and federal auditing authorities

2. Cooperating and communicating with other external financial stakeholders

3. Overseeing finance with AGDC standards and policies relating to business conduct and ethics

4. Overseeing the effective and regular project governance and the assurance process including obtaining assurance as to the adequacy of the systems of internal control in place throughout the project, including the following:

a. A documented assurance process

b. An annual review of the process by the Finance and Audit Committee

The Finance and Audit Committee is to review and make recommendations to Board of Directors if and when changes to its governance or processes are needed.


The Finance and Audit Committee will have the delegated authority to carry out, on behalf of AGDC, all matters described herein.

1.2.6 Reporting

The chair of Finance and Audit Committee will report to the Executive Committee on decisions of the Finance and Audit Committee and provide advice on any material concerns following each meeting. The minutes of Finance and Audit Committee meetings will be circulated to all Finance and Audit Committee members.

1.3 PROCUREMENT AND CONTRACTS COMMITTEE

1.3.1 Membership

Chair: Board of Directors Member



In the absence of the chair, the members of Procurement and Contracts Committee who are present will elect an interim chair from among the AGDC members present.

Members:

• Other Board Members (as assigned by the Chairman)

• Individual Project Commercial Managers (such as ASAP Commercial Manager)

• Individual Project Services Managers (such as ASAP Project Services Manager)

• Individual Project Construction Managers (such as ASAP Construction Manager)




Meetings will be held bi-monthly, or at such other frequency as determined from time to time by the chair. Working groups may be established by the Procurement and Contracts Committee to consider and address specific issues on its behalf.

1.3.3 Decisions



The Procurement and Contracts Committee will advise on, assist, make recommendations, and report, as required, to facilitate the following for the Executive Committee:

1. Understanding, reviewing, and monitoring implementation of individual project procurement strategies

2. Considering and recommending to the Board of Directors the following appropriate procurement and contracting elements relating to the procurement of the project to comply with procurement requirements:

a. Policies

b. Strategies

c. Procedures

3. Reviewing and approving the individual project procurement strategies

4. Review after the fact of the execution of project procurement planning and execution

5. Review of the preparation and submission and providing feedback for the following:

a. Invitation to tender(s) or requests for proposal(s)

b. Contract document(s)

c. All related procurement documentation

6. Managing project conflicts of interest, including the following:

a. Defining a conflict of interest

b. Determining an approach to conflicts of interest

c. Proposing management principles for conflicts of interest

d. Deciding and recommending the project’s appropriate course of action

e. Ongoing management and review of conflicts of interest



7. Understanding, reviewing, and monitoring the annual operating and delivery plans and budgets and reporting the same as it pertains to procurement

8. Understanding, reviewing, and monitoring implementation of the project strategy as it pertains to land and property, including the following:

a. Considering and recommending to the Executive Committee the following appropriate elements relating to the acquisition and disposal of land and the commercial development of land:

i. Policies

ii. Strategies

iii. Procedures

b. Overseeing the land acquisition required for the project

c. Overseeing the implementation of the scheme of delegated authority as may be approved by the Executive Committee regarding negotiation, agreement, and payment of compensation relating to the acquisition of land and property interests including approval of proposed acquisitions and property-related matters

d. Overseeing the finalization of the project routing in so far as it affects the commercial development of land acquired for the project up to the receipt of planning consent for each site:

i. Enumerating design changes

ii. Confirming whether such design changes require Executive Committee approval

e. Implementation of policies relating to safeguarding of land, inclusive of giving direction where required actions need to be taken to safeguard land

f. Overseeing the preparation and submission of applications for planning consents

The Procurement and Contracts Committee shall review and make recommendations to the Executive Committee if and when changes to its governance or processes are needed.


1. To monitor and review project procurement:

a. Policies

b. Procedures

2. To propose and review project procurement:

a. Strategies

b. Tender documentation

3. Delegated authority to approve on behalf of AGDC:

a. Authority for decisions encompassed and required by Procurement and Contract Committee’s responsibility described herein valued up to [$?????? ] unless otherwise specified in future delegated authority requirements.

4. To approve on behalf of AGDC procurement-related needs valued at over [$??????? ].

1.3.6 Reporting

The chair of Procurement and Contracts Committee will report to the Executive Committee on decisions of Procurement and Contracts Committee and provide advice on any material concerns following each meeting. The minutes of Procurement and Contracts Committee meetings will be circulated to all Procurement and Contracts Committee members.


2. POLICIES AND GUIDING PRINCIPLES

2.1 COMMUNICATIONS AND MEDIA POLICY

2.1.1 Guiding Principle

Provide clear, consistent and controlled messaging to effectively promote Alaska Gasline Development Corporation (AGDC) objectives and proactively respond to criticism of any ongoing, past or future activities, including the Alaska Stand Alone Gas Pipeline Project (ASAP Project).

2.1.2 Purpose and Scope

The purpose of this policy is to minimize the potential for inadvertently creating negative or contradictory information being disseminated to the media or the public. The AGDC staff may be contacted for comments about the organization, the activities of the AGDC or individual projects. To provide consistent, accurate information, only designated individuals may speak on behalf of AGDC. Public relations will be handled by the AGDC Public Affairs group and all inquiries should be discussed with a representative of that organization prior to response. If asked for information by an outside party (such as a journalist, financial analyst, or attorney), do not respond to these inquiries; direct them to Public Affairs representatives. Do not provide ‘off-the-record’ comments or respond to electronic (email, blogs) inquiries, or post comments which could be attributed to AGDC or individual project in public forums, including social media forums. When speaking about AGDC activities or individual project activiteis at public or industry events or on expert panels, be aware that what is said will be attributed as an official position and may be quoted by media without prior knowledge or consent.

This policy covers all aspects of communications from employee communications to media relations to stakeholder engagement activities. The Communications and Media Policy is intended to help with the following:

• Gain necessary approvals and support from stakeholders about AGDC or individual project actions

• Keep the local communities affected by project activities informed of progress on issues such as enabling works, potential disruptions, job opportunities, construction, and working conditions

• Build trust and credibility by ensuring information and representation of the project delivery is accurate, relevant and communicated in a timely manner, especially in relation to the gas producers and the remainder of the supply chain

• As required, provide an understanding of what the AGDC or individual projects are doing and why

The scope of the Communications and Media Policy includes the following:

• Business and government relations, including federal, state, and local governments, as well as the procurement/supply chain

• Media relations, including consistent messaging to all media, delivered by approved sources


2.1.3 Applicability

The Communications and Media Policy is applicable to all parties working for AGDC operations or individual projects, whether AGDC employees or employees of contractors providing support. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.

2.1.4 Implementation

The Communications and Media Policy will be implemented through the following actions:

• Provide forward planning to identify and characterize upcoming AGDC or individual project activities to shape public opinion as required prior to any possible negative issues that might arise from those activities

• Establish regular communications about AGDC activities or individual project milestones, status, proposed plans, operational accomplishments, human and community development initiatives, and other positive actions or outcomes of the individual projects

• Create an early tracking system to identify issues that could affect AGDC or individual project performance

• Develop response strategies and protocols as appropriate

• Develop and deliver an effective internal communications program which ensures that all staff and contractors are communicating the same messages and are confident in doing so

• Issue editorials, press releases, and stories as needed when AGDC or individual project activity warrants

• Proactively correct incorrect or negative media stories when a more positive perspective is available.

2 POLICIES AND GUIDING PRINCIPLES


2.2 CONFIDENTIALITY POLICY


Balance the protection of individuals and entities from undue influence, loss of privacy or exposure of proprietary information against the need for transparency in the delivery of AGDC work activities


The purpose of this policy is to build confidence and trust among the parties engaged in developing and delivering AGDC development activities, including individual development projects such as the ASAP project. AGDC personnel and contractors will have access to certain business, financial, technical and process information that are of value to the owner of said information. Such information, together with other business and financial information of the parties is to be held in strict confidence.

The scope of the confidentiality policy includes all information about personnel, business processes, financial agreements, intellectual property, negotiations, and contract terms. This policy is intended to make information accessible only to those authorized to have access to it over the course of AGDC sponsored activities. Confidentiality is important in business because it provides a barrier around the amount of personal and business information that can be disclosed without consent. Trusting that the confidentiality policy is being enforced allows parties to share sensitive information that may be critical to the successful execution of contracts and employment agreements.

The scope of this confidentiality policy covers information shared with AGDC and individual project staffs, , and among the various departments and contractors. It does not imply that any of them should consider their communications or use of media as private. Staff, including employees and contractors on AGDC funded projects, should have no expectation of privacy from AGDC for any information stored on or sent through AGDC computers, equipment, or communications systems.

2.2.2.1 Protection of Personal Information

In today’s electronic information exchange and storage environment, employee privacy and the protection of every employee’s personal information are of paramount importance. The AGDC, the ASAP PMT, and other Project contractors will follow reasonable information security procedures to protect employees’ personal information. To provide services such as health care benefits and insurance, an employee’s personal information may need to be shared with outside vendors. Unless otherwise required by law, the AGDC and the ASAP PMT will obtain consent before transferring personal information to others.

2.2.2.2 Use of Communication Systems and Technologies

The AGDC and the ASAP PMT expect that communication systems will be used for work-related purposes and employees will only access appropriate content. Employees should have no expectation of privacy or confidentiality about any information received or transmitted while using business communication systems. The AGDC and the ASAP PMT will monitor use of the Internet and business communications systems and may access emails and other data transmissions. The AGDC and the ASAP PMT reserve the right to block access to offensive, illegal, and non-business-related Internet sites and to intercept transmission of any inappropriate materials. Attempts to access offensive or illegal content through our systems or using our computers to store such content may result in disciplinary actions, including termination of employment.


2.2.3 Applicability

The Confidentiality Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to AGDC or individual project teams. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by the degree to which protected information is accessible only to those authorized to have access to it over the duration of AGDC sponsored activities, including individual projects. The Confidentiality Policy will be implemented through the following actions:

• An employee will not reveal confidential business information to any unauthorized person or entity that may cause consequences to either the employee or the organization. This agreement is a blanket promise that covers all the AGDC employees.

• Individual AGDC projects will adopt and enforce non-disclosure agreements with contractors and suppliers. The non-disclosure agreements will contain language specifying that any direct or indirect use or dissemination of confidential information relating to the individual project, its employees, consultants, or suppliers to outside third parties except as provided by law is absolutely forbidden while under contract, and after the contract has terminated.

The following items are protected by and barred from disclosure under the Confidentiality Policy:

• Personnel information

• AGDC, ASAP PMT, or subconsultant trade secrets, business methods, or processes, and

• Information regarding inventions, patents, or discoveries created during, or as a result of, AGDC or ASAP project activities



2.3 CONFLICT OF INTEREST POLICY


Avoiding conflicts of interest in all aspects of the Project will preserve the trust that the State of Alaska have given AGDC.


The scope of this policy includes all activities related to AGDC operations, including management, design, procurement, construction, and operations of individual projects and their delivered facilities. A conflict of interest occurs when an AGDC employee or subconsultant could act in their own interest or the interest of family or associates rather than in the best interest of AGDC. It is not unethical to have a conflict of interest. How conflicts of interest are identified and resolved is the measure of our ethics.

Conflicts of interest arise when our personal or financial interests interfere or appear to interfere with our professional judgment and/or objectivity. Conflicts are inevitable in a large Project. If something does not feel quite right, chances are it is not and guidance should be requested. When dealing with conflicts, disclosure is critical. Timely disclosure to all affected parties resolves most conflicts of interest and can avert an embarrassing situation. If a conflict cannot be addressed through disclosure, we will address it through re-assignment of personnel or change how we deliver our work. Always disclose both actual and apparent conflicts of interest to your supervisor immediately.

2.3.2.1 Personal Conflicts of Interest

A personal conflict of interest exists whenever individuals may be influenced by their own personal interests or relationships when making decisions on behalf of AGDC, the ASAP PMT, or the ASAP project in general. For example, if an employee has a close relative in another company, the employee has a personal conflict of interest with respect to any decision he or she may make on behalf of AGDC or the ASAP project to do business with that particular other company.

2.3.2.2 Organizational Conflicts of Interest

An organizational conflict of interest may arise when AGDC, the ASAP PMT, or a subconsultant’s work on one project conflicts with our interest in another. That conflict has the potential to affect our ability to render impartial, technically sound, objective guidance and advice, or may result in an unfair competitive advantage.

2.3.2.3 Apparent vs. Actual Conflicts of Interest

An apparent conflict of interest can be just as much of a problem as an actual conflict of interest. While we may be perfectly capable of making an unbiased decision, if an appearance of a conflict of interest exists to those outside of AGDC or an individual project, it may appear that we are not being objective. Such appearance of impropriety can undermine the integrity of AGDC, just as much as if a conflict actually existed. An apparent conflict of interest should be taken seriously and resolved as if it were an actual conflict of interest.


2.3.2.4 Doing Business with Employees, Friends, and Family

When a personal or family relationship exists between employees working together, it may create tension in the workplace and may appear as though some employees are receiving preferential treatment. No family member should be in a position where he or she has decision-making authority over another family member.

A conflict of interest exists if you, your family member, or close friend has a personal stake in a company that is a supplier to, or a subconsultant of AGDC, an individual project PMT, or subconsultants on an individual project. Immediately notify your supervisor if you become aware of an existing or pending business transaction between AGDC, an individual project PMT, or a subconsultant and a party directly or indirectly related to you or another employee. If you are directly involved in the supplier selection process, notify your supervisor immediately and remove yourself from the decision-making role.

2.3.2.5 Outside Employment

Accepting employment outside of AGDC, an individual project PMT, or a subconsultant may create a conflict of interest. To avoid such potential conflicts, employees should not accept a job or run a business that may interfere with their work. Before accepting any external employment or business commitment, consult with your supervisor and receive written approval to proceed. Employees may not accept supplementary employment or have a business partnership with our suppliers, clients, or competitors.

2.3.2.6 Serving on a Board of Directors

Serving on the board of directors for any organization (whether such service is compensated, the organization does business with AGDC, an individual project PMT, or a subconsultant, and profit status) requires advance written approval. The staff member must consult with their line supervisor before accepting an appointment. Employees may not serve on the board of directors for a company that competes with, supplies goods or services to, or purchases services from AGDC, the individual project PMT, or a subconsultant.

2.3.2.7 Gifts and Entertainment

Business gifts and entertainment are courtesies designed to build working relationships with suppliers and contractors. When offering or providing gifts, entertainment, meals, or anything of value, we should be guided by good judgment, discretion, moderation, and transparency. Giving or receiving anything of value is not appropriate if it creates an obligation, puts you in a situation where AGDC or the individual project PMT appears biased, or influences our business decisions. Employees will not solicit or accept any gifts, favors, loans, gratuities, rewards, promises of future employment, or any other things of value, including travel and lodging. It is also our policy that we do not offer gifts or entertainment to clients to influence their business decisions.

Accepting or offering gifts or entertainment is generally discouraged and is permissible only in circumstances when gifts or entertainment correspond to the following qualifications:

• Nominal in value

• Not prohibited under the contract or by relevant regulations

• Infrequent, in good taste, and unsolicited



• Not cash or a cash equivalent (e.g., gift cards), and

• Special occasions when gifting is customary and to do otherwise may be deemed inappropriate (e.g., retirement celebration)

If you are offered unacceptable gifts or entertainment, decline politely, citing this policy. If, in good faith, you believe that declining an offer may not be in AGDC’s or the individual project PMT’s best interest, get written approval from your supervisor before accepting it.

2.3.3 Applicability

The Conflict of Interest Policy is applicable to all parties working for AGDC, including on individual projects, whether AGDC employees or employees of contractors providing support to AGDC. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by AGDC employees’ and contractors’conduct with respect to conflicts of interest, including avoiding such circumstances and identifying and resolving perceived, potential, or actual conflicts of interest. The Conflict of Interest Policy will be implemented through the following actions:

• All AGDC staff will understand and sign a conflict of interest statement.

• Contracts will have specific conflict of interest requirements and responsibilities for reporting conflicts.

• AGDC staff will be provided training to recognize, avoid, or resolve conflicts of interest in accordance with the contract clauses.

• Where a potential conflict of interest is discovered, the potential conflict is to be fully disclosed immediately to all affected parties and reported to AGDC for resolution.

• If someone outside AGDC raises a perceived, potential, or actual conflict of interest, the response will start with the guiding principle contained in this policy.

• AGDC staff will not establish, or cause to be established, a direct or indirect business relationship between AGDC and any entity (contractor, supplier, land owner, or otherwise) owned in part or whole by a family member. For this policy, family is defined as the employee’s spouse, children, parents, brothers, and sisters.

• AGDC staff may not promise, give, ask for, or take any bribe to help any entity receive favorable treatment.

• AGDC staff may not accept any gifts, entertainment, loans, or anything else of value from a contractor, supplier, customer, or any entity that has commercial dealings with AGDC, with the exception of normal personal loans with common terms offered by official financial institutions.


2.4 ETHICS AND BUSINESS CONDUCT POLICY

2.4.1 Guiding principle

Deliver AGDC and individual sanctioned projects in accordance with high standards of ethics and integrity.

2.4.2 Purpose and scope

The purpose of this policy is to support and enforce the values of ethics, integrity, and lawfulness that are core values fundamental to the success of any worthwhile endeavor. Integrity is a requirement for any individual seeking employment or a business opportunity through AGDC pursuits. High ethical standards are the foundation for maintaining the integrity our global business partners expect, and for producing the world-class ASAP project and other individual projects entrusted to us. The AGDC Ethics and Business Conduct Policy specifically supports the following business behaviors:

• Act with integrity, fairness, and transparency

• Comply with legal, regulatory, and license requirements

• Do not tolerate corruption in any form

• Do not influence clients’ procurement decisions through improper means

2.4.2.1 How to Identify Ethical Violations

In today’s complex business environment, you may, from time to time, encounter an ethical dilemma. If you are unsure of the right course of action, ask yourself the following questions:

• Is my conduct ethical?

• Does it comply with the policies and guiding principles policies?

• Does it comply with the law?

• Does it feel right?

If your answer to any of these questions is anything other than a solid ‘yes,’ do not take the action. If you are still in doubt, seek guidance by talking with your supervisor.

2.4.2.2 Seeking Guidance and Reporting Potential Ethics Violations

We have a duty to our organization and fellow employees to report known or suspected violations of our Employee Ethics and Business Conduct Policy. If an employee suspects, or becomes aware of misconduct, or if has a question about what is the right thing to do, they should contact any of the following resources:

• Supervisor, if not directly involved in the issue

• Human resources (HR) representatives

• Any member of the legal department



If you are asked to participate in an investigation related to an ethics or business conduct issue, you are expected to cooperate fully in good faith and will be protected from any retaliation. The AGDC, the ASAP PMT, and fellow employees need and expect your help to protect our values and reputation.

2.4.3 Applicability

The Ethics and Business Conduct Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support AGDC corporate or individual projects. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by AGDC employees’ ethical business conduct, including avoiding the appearance of impropriety and identifying and resolving perceived, potential, or actual ethical violations. The Ethics and Business Conduct Policy will be implemented through the following actions:

• There is zero tolerance for corruption. Everyone working for or on behalf of AGDC is prohibited from engaging in corrupt behaviors. For example, giving or receiving of bribes in any form is prohibited and will not be tolerated.

• Employees must immediately disclose actual or potential conflicts of interest. While AGDC employees have a right to privacy in their personal affairs and activities, a conflict of interest can arise where personal, social, financial, familial, or political interest may influence, or appear to influence, the employees’ loyalty to or the objective exercise of their duties. Employees must immediately register the conflict with their manager.

• The Project has zero tolerance for the use of forced labor or other human trafficking practices. As part of our commitment to the global community, we respect and protect the rights of those who work on behalf of the Project.

• Business records will be maintained accurately, which is essential for understanding how our business operates and affects our ability to report performance. Employees will report all time, expenses, project and cost information, training activities, and health and safety incidents accurately and timely. Falsification or fabrication of our business records contradicts our core values.


2.5 FINANCIAL POLICY


Establish and maintain financial systems to ensure that all monies invested in AGDC and individual projects are accounted for and return the value intended.


The purpose of this policy is to reinforce the AGDC commitment that all transactions entered into and all activities performed, whether financial or otherwise, conform to acceptable industry and national standards and practices. Further, this policy describes the processes and measures that will be followed by AGDC staff to ensure that all financial transactions comply with applicable national and international agreements and regulations.

The scope of this policy covers the financial, treasury, and accounting aspects of AGDC operations and individual projects. This policy specifically covers staff having responsibility for the financial operation of AGDC or individual projects. It is the responsibility of all financial administrators to familiarize themselves with this policy and all applicable procedures to properly oversee and guide financial activities occurring on behalf of the AGDC and accurately respond to questions about AGDC finances as applicable. It is the responsibility of every employee to follow stated policy and procedures.

2.5.3 Applicability

The Financial Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to corporate operations or individual projects. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by AGDC employees’ conduct with respect to financial management, including maintenance of proper accounting procedures, timely and accurate reporting, and identifying and resolving perceived, potential, or actual financial irregularities. Enforcement of this financial policy and related procedures will result in timely and accurate financial information that is understood and reliable for decision making. Compliance with existing policies and accepted industry practices is intended to help AGDC efficiently realize its goals and manage its economic resources.

The Financial Policy will be implemented through the following procedures and activities:

• Alaska Gasline Development Corporation financial policies

• Alaska Gasline Development Corporation purchasing policies

• Alaska Gasline Development Corporation credit card policy

• Operations that incorporate controls, checks and balances, and protection of assets



• Individual project PMT and project invoicing

• Time reporting procedures

• Expense reporting procedures

• Expense reimbursement procedures

• A financial management system that complies with applicable accounting standards


2.6 HEALTH, SAFETY, AND ENVIRONMENT POLICY


Provide a safe, healthy, and environmentally friendly environment for AGDC employees and contractor employees working on individual AGDC sanctioned projects.


The purpose of this policy is to create a culture where each individual understands and believes that they play a role in working safely because it has a direct effect on the quality of their lives and the outcome of the AGDC activities. To impart and foster this culture, leadership must also recognize that a healthy, safe, and environmentally sound workplace enhances quality, improves productivity, and generates value.

Good health, safety, and environmental management are core business values and leadership is committed to creating a future free of incidents and injuries. To achieve the goals, the following attitudes and behaviors must be instilled in everyone working on for AGDC:

• People should be respected. Everyone involved in or affected by our work should be protected.

• Everyone is actively engaged in designing, creating, and maintaining healthy and safe environments.

• Leadership’s passion for and commitment to health, safety, and the environment are evident to all levels of the organization and line management is totally accountable and responsible for maintaining standards.

• Attitude and behavior should replace statistics as a measure of success.

There are three levels of health, safety, and the environment policy: AGDC corporate Level, individual project level, and individual sub-projects level. The scope of the health, safety, and environment policy includes everyone working on any aspect of AGDC or its individual projects. Each employee is required to support and promote this policy in addition to complying with the requirements and duties contained in the health, safety, and environment procedures.

2.6.3 Applicability

The Health, Safety, and Environment Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to the corporate operations or individual projects. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by AGDC employees’ conduct with respect to health, safety, and the environment, including recognizing, alerting others, and avoiding unhealthy or unsafe work conditions and environmental actions. The success of this policy will be measured by the degree to which everyone on or affected by AGDC operations returns home safely every day and is able to continue with their normal



routines, including returning to work the next day. The Health, Safety and Environment Policy will be implemented through the following actions:

• Enact a full emergency preparedness and response program

• Enable employees to make safe choices about their own and their co-worker’s safety and to alert management to unsafe conditions in the environment in which they work

• Recognize and reward good safety behavior with the goal of peer pressure replacing policing, thereby acting unsafely will be considered anti-social

• Training the workforce well to fully know they are responsible for and expected to contribute to the safety of their work

• Include hiring practices with the requirement to value safety and support the AGDC vision by only hiring those who are unwilling to compromise on safety

• Continually improve environmental performance of all activities, products, and services

• Comply with applicable agreements and standards and regularly evaluate continuing compliance

• Minimize environmental impacts associated with AGDC activities, products, and services

• Strive to minimize the production of carbon and other polluting emissions or discharges into the environment

• Proactively protect and preserve wildlife and natural habitats

• Set objectives, targets, and programs, then review and revise them regularly with the aim of continual improvement in environmental performance

• Consult with interested stakeholders and effectively communicate this health, safety, and environmental policy to all those working for and on behalf of AGDC

• Ensure that managers at all levels will assess risk and identify hazards and control measures to be adopted to eliminate or avoid hazards

• Assess designs to eliminate or reduce risks in construction and during operations of the facilities

• Identify major risks in tender documents and require that appropriate provisions be made in the tender offer to reduce or eliminate those hazards

• Regularly (at least quarterly) assess existing work activities and forthcoming major work elements to identify potential hazards and opportunities to mitigate or eliminate them

• Identify task-specific control measures where hazards that cannot be eliminated are identified


• Produce method statements for high-risk operations where control measures are not immediately obvious from, for example, standard procedures or health and safety or environmental management plans

• Establish objectives and targets to drive continuous improvement in matters of health, safety, and the environment. Objectives and targets should include resources needed, training and auditing, new initiatives proposed, and specific targets against which performance can be measured.

• Disseminate health, safety, and environmental information through:

˗ Employment information

˗ Health, safety, and environmental management system

˗ Health, safety, and environment plans

˗ Induction processes

˗ Posters, newsletters, and announcements on site notice boards

˗ Formal safety courses

˗ Web-based information systems

˗ Safety alerts

˗ Briefings, method statements, and tool box talks

˗ In-house safety publications, such as the pocket booklets

˗ Include health, safety, and environmental on the agenda for all meetings



2.7 HUMAN RESOURCES POLICY


To attract and retain the right mix of skills to deliver AGDC activities safely and in a cost effective and timely fashion.


The goal of this policy is to provide an employment environment that is objective, supportive, and encourages development. The expertise, integrity, and creativity of staff are of paramount importance to AGDC success. This policy is specifically designed to achieve the following results with respect to the behavior of management and staff:

• Act with integrity, fairness, and transparency

• Treat people with fairness, decency, and respect

• Help people develop to their full potential

This HR policy covers all members of AGDC. It sets the standards for how both AGDC management and AGDC staff should conduct themselves as members of the delivery team. This includes how we perform our jobs, make decisions, interact with one another, and manage the business operations of AGDC. AGDC leadership should ensure the fair and consistent application of all AGDC HR policies. Managers should seek to advance the long-term interests of AGDC, and maximize the quality, effectiveness, and productivity of their area of responsibility and the employees entrusted to them. Employees should always strive to perform their duties to the best of their abilities, be respectful and tolerant of others, and uphold the AGDC values.

2.7.3 Applicability

The Human Resources Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to AGDC. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation 2.7.4 Implementation

The Human Resources Policy will be implemented through the following actions:

• Publish and maintain consistent HR standards and guidelines

• Adapt standards and guidelines to meet the needs of the diverse workforce

• Clarify the behaviors that are expected of employees in the performance of their work

• Establish clear accountabilities for all employees

• Conduct an annual performance review for each employee to enable meaningful dialogue between employees and line managers on the achievement of goals and objectives


• Conduct annual development reviews with all employees to help them develop to their full potential

• Offer a transparent reward system to ensuring intended behaviours are encouraged and unwanted behaviours are discouraged

• Provide an environment where employees are able to work without discrimination or harassment

• Promote employee health, safety, and the environment

• Recruit and hire using fair and objective criteria to create equal opportunity for candidates within the diverse employment pool

• Establish and practice an objective and fair means for handling legitimate employee grievances

• Ensure employees receive appropriate training to enable them to perform their duties competently

• Act in the best interest of, and avoid bringing disrepute, to the ASAP project

This policy will be further implemented and enforced by developing and applying procedures for the following:

• Hiring and employment

• Employee relations

• Professional conduct

• Employee development

• Time away from work

• Compensation

• Work hours

• Time reporting

• Pay practices

• Work-related travel

• Expense reporting



2.8 INFORMATION TECHNOLOGY POLICY


Purchase, implement, and maintain IT to efficiently deliver AGDC activities, including individual projects.


The purpose of this policy is to allow employees to perform their tasks as effectively as possible while ensuring that the technology infrastructure remains reliable and usable for AGDC operations.

The main goals for having an IT policy are as follows:

• Maintain an optimum balance between business requirements and IT systems, equipment, and services needed to achieve AGDC goals

• Measure key performance indicators to improve operations and performance across the organization

• Establish a budgeting framework and track investments to measure return on investment

• Structure the procurement of systems, equipment, and services

The scope of the Information Technology Policy, together with associated processes and procedures, covers all computing and communications systems and equipment used, owned, or leased by AGDC or individual projects and any that may be used or installed for the benefit of AGDC. This includes but is not limited to, all documentation, software, hardware, peripheral equipment, wireless equipment, and infrastructure.

2.8.3 Applicability

The Information Technology Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to the ASAP project. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation.


Adherence to this policy will be measured by AGDC employees’ conduct with respect to securing and properly using AGDC information, equipment, and technology. This includes the appropriate dissemination of and access to sensitive AGDC information, regardless of the medium on which the information is contained. The Information Technology Policy will be implemented through the following actions:

• Maintain proper clean-desk practices to secure printed and online information

• Develop long-term (i.e., strategic) and short-term (i.e., operational) plans to align IT with organizational mission, vision, and strategy

• Monitor and measure IT performance as necessary in response to changing business requirements, technological advancements and/or change in technology environments


• Communicate the strategies and plans to line managers to improve overall use of and investment in technology

• Develop, implement, and enforce procedures to protect the following specific types of information and media:

˗ Computer

˗ Desktop

˗ Email

˗ Internet

˗ Mobile

˗ Network security



2.9 PROCUREMENT AND CONTRACTING POLICY


Establish and manage transparent and fair procurement and contracting to attract necessary outside consultants, contractors, and suppliers to achieve certainty of outcome at optimum cost.


The purpose of this policy is to establish and maintain effective and efficient procurement and contracting processes that efficiently deliver value-based, professional, legally compliant, and ethical performance over the course of AGDC activities, including individual projects. This policy and the associated implementation methods are intended to promote consistency and transparency in AGDC purchasing and contracting and result in the following benefits:

• Find the best solution for the money spent

• Maintain efficient operational costs after the purchase

• Know the quality of items or services purchased

• Provide the best value for the price

• Optimize efficiency of purchasing process and delivery of goods or services

• Have a balance of materials on hand and ability to replenish as required

• The scope of this policy also includes quality management, which should be applied to all procurement and contracting activities, to achieve best-in class-performance

2.9.3 Applicability

The Procurement and Contracting Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to AGDC corporate operations or individual projects. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation. 2.9.4 Implementation

This policy will be enforced through processes that dictate how requests for goods or services by a user or department will be obtained by procurement staff. Procurement staff will carry out the functions of soliciting, negotiating, purchasing, distributing, and tracking use and disposal or discharge of all goods and services purchased for use by AGDC or individual projects. The Procurement and Contracting Policy will be implemented through the following actions:

• Include provisions for health, safety, and the environment in all contracts and orders

• Include provisions for security, security reviews, and security audits, as appropriate for the type of procurement in all contracts and orders


• Confirm that quality requirements are included in supplier and subcontractor work, procedures, and products

• Increase benefit through timely procurement planning, competitive procurement, clear specifications, objective evaluations, volume purchasing, and negotiations

• Meet procurement and contracting demand by proactively recruiting, hiring, and training so that enough resources are available

• Establish procurement policies and processes that are compliant with national and international law, controlled by conducting regular management reviews and internal audits to ensure continuous improvement and efficiency

• Conduct procurement and contracting activities so that potential suppliers and subcontractors can clearly understand the processes and requirements

• Comply with provisions of any non-disclosure agreements and require suppliers to do the same

• Establish policies and procedures that reinforce the Ethics and Business Conduct Policy to deter fraud, theft, corruption, and mismanagement

• Provide appropriate and adequate tools, technologies, and systems to fulfil procurement and contracting orders, decision-making, and reporting

• Promote and encourage innovation to make procurement and contracting activities more effective, and capture critical knowledge gained

• Establish clear delegations and levels of authority for all procurement and contracting transactions and activities



2.10 QUALITY


Manage quality to proactively improve work processes, inspection techniques, performance standards, and outcomes to create high levels of satisfaction of AGDC staff and participants.


The purpose of this policy is to establish quality assurance requirements, performance expectations, and self-assessment expectations to foster and empower continuous improvement. AGDC and the individual projects will integrate quality into the performance of activities that have the potential to adversely affect staff, the public, or the environment. Quality is the key to delighting customers and exceeding their expectations. Quality is part of the foundation of AGDC and permeates every interaction, conversation, and task that we perform. Quality is an expectation that we strive to achieve by performing at the highest level of our capabilities and continuously seeking to improve. Quality should be evident in both the highly visible products and services that we deliver and in the normal, everyday interactions we have with our colleagues.

This policy covers all employees and describes how they are to conduct their work activities to meet AGDC requirements and stakeholder expectations. This commitment to quality applies to all work undertaken by or on behalf of AGDC. The reach of the Quality Policy covers human, social, economic, and environmental development, which will be enhanced by simplifying processes and optimizing workflow, eliminating inefficiency and non-value-added activities, and engaging employees in these improvement processes. Quality and continuous improvement are the responsibility of each AGDC employee and all others working on individual projects.

2.10.3 Applicability

The Quality Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to AGDC corporate operations or individual projects. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation. 2.10.4 Implementation

The Quality Policy will be implemented through the following actions:

• Communicate quality requirements to contractors, vendors, and the work force through printed material, meetings, training sessions and toolbox talks as applicable

• Establish key performance indicators against which the performance of, and improvements to, the quality process will be measured, monitored, and assessed

• Develop and obtain appropriate approval of controls and procedures before starting associated work

• Integrate quality processes into everyday work activities to create the products and services that meet AGDC requirements and community expectations


• Establish and deliver training programs to enhance AGDC participant understanding of the relationship between work activities and quality principles

• Establish procedures for internal auditing, corrective and preventive action, collection of client feedback, and collection and analysis of quality-related data that support continuous improvement



2.11 SECURITY POLICY


Employ the most sophisticated tools and techniques to ensure safety and security of AGDC and individual project developed facilities.


The purpose of this policy is to establish the foundation for protecting and preserving information, physical assets, and human assets. Potential threats to AGDC assets include theft, sabotage, terrorism, vandalism, natural disaster, catastrophes caused by human failure, accidental damage, and other non-traditional threats.

This policy covers all AGDC information, facilities, equipment, technology, and physical locations. This policy includes physical and technological security measures such as prescriptive facility design and construction measures, emergency preparedness, power supply redundancy, climate control, video monitoring, alarm systems, effective access controls, and technology firewalls.


The Security Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to the ASAP project. Further information on implementation of this policy can be found in the AGDC Business Execution Plan and its supporting documentation. 2.11.4 Implementation

Adherence to this policy will be measured by the degree to which security measures are implemented in all aspects of AGDC operations, including workplace security practices and security reviews throughout the design, construction, and operational phases. This also includes appropriately protecting and controlling access to sensitive AGDC information, securing facilities and equipment, and instilling an understanding of the need for high levels of security in all AGDC participants. The Security Policy will be implemented through the following actions:

• Identify the assets that need to be protected

• Identify the vulnerabilities, threats, and likeliness of a threat being realized or a vulnerability being exploited

• Decide which measures would protect the assets in the most efficient and cost-effective manner

• Continuously monitor and evaluate security measures and identify potential improvements

• Conduct security audits

• Establish and strictly enforce visitor and contractor access procedures for all facilities and work sites


2.12 RISK MANAGEMENT POLICY


Employ modern project and corporate risk management tools to understand potential risks to success of AGDC endeavors and determine appropriate handling techniques to maximize the potential for success.


A risk management framework establishes the requirements and guidelines that govern overall project risk management, including the establishment, calculation, management, utilization, documentation, and reporting of project risks, trends, and overall ability to complete the project within cost and schedule plans.


The Risk Management Policy applies to all individual projects sponsored by AGDC, including risks to delivery of the project as well as corporate risks that apply to either individual AGDC projects or the consolidated risks of the overall AGDC Program Management Office.


A group of organizations are responsible for implementation of the needed risk management principles to be successful across AGDC:

• The AGDC PMO Director is responsible for oversight of the individual project risk management plans and consolidation of those plans into an overall AGDC Risk Management plan

• The individual Project Manager is responsible for managing the overall project budget, including developing the baseline cost, the project contingency, and developing the risk register for approval.

• The individual project Risk Manager is responsible for managing the overall risk profile, including collecting risk registers and contingency information for each delivery project and ensuring that contingency is calculated in accordance with the Executive Committee’s guidelines.

• The individual Project Services Manager is responsible for reporting the individual PMT budget, including total cost of all projects, non-project costs, and project managed contingency.



2.13 DELEGATION OF AUTHORITY POLICY


Establish and maintain clear lines of authority and criteria for delegation of that authority to effectively control cost and risk, and successfully deliver AGDC sanctioned activities.


The purpose of this policy is to establish the limits of authority designated to specified positions of responsibility within the AGDC organization, including individual project teams. It establishes the types and maximum amount of obligations that may be approved by individuals and groups across the three levels of the corporation (executive leadership, AGDC personnel, and individual project team personnel). The commitments and transactions outlined in this policy must always be approved by the parties who have been given the responsibility for final approval.

Persons who have staff reporting to them should take all necessary steps to ensure their employees know and follow the policy. In this connection, all managers should periodically consult with their staff members to determine that appropriate procedures for implementation of the policy have been developed and are being followed.


The Delegation of Authority Policy is applicable to all parties working for AGDC, whether AGDC employees or employees of contractors providing support to AGDC.

2.13.3.1 Combining Transactions Dividing a commitment or transaction into two or more parts to evade a limit of authority is prohibited and is a violation of the policy. This policy shall be interpreted broadly so that a series of reasonably related transactions shall be considered a single transaction for purposes of determining approval and authority levels required by this policy.

2.13.3.2 Temporary Delegation of Authority to Subordinates It is emphasized that commitments and transactions cannot be approved by individuals having a lower level of approval authority than the specified transaction requires, except when that authority is delegated, and then can only be exercised for the temporary, limited purpose of the specific delegation. Temporary authority may be designated on a case by case basis. In all circumstances, temporary authorization is to be in writing, must specify the effective length of time approval authority is delegated, and must be approved by the supervisor of the individual who is delegating authority.


Compliance with the policy by each functional group is the responsibility of the manager of that functional group.

2.13.4.1 Responsibilities and Authorities Matrix Table 3 describes the interactions between various groups in approving various types of decisions to support execution of AGDC work, including the ASAP project:

Table 1. Approval Interactions

Action Type Board of Directors

Executive Leadership

Project Manager

Functional Manager

AGDC Procurement

Procurement strategy R A

Individual RFP release I I A R C

Individual RFP award I I I A R


Table 1. Approval Interactions

Action Type Board of Directors


Project Manager

Functional Manager

AGDC Procurement

Contract signature I I I A R

Purchase requisition

I A R

Task order and change orders under master services agreement

I A R

Stage gate progress A A

Legend:

R – Review – Provides feedback to either the individual who prepared the action in question or to the approval authority

A – Approve – Authority to approve the action C – Consult – Provides Information in advance to this group in a timely manner that allows feedback prior to the action being taken I – Inform – Provide information after the action is taken to inform this group of the action that was taken

2.13.4.2 Levels of Signature Authority Table 4 describes levels of delegated authority to support execution of AGDC work, including the ASAP project:

Table 2. Delegated Authority

Category Description Board of Directors


Functional Manager

Procurement

Authority to approve the submittal of a contract or purchase requisition to the procurement department for processing within AFE

Yes Yes Yes

Overall Project Gates

Authority to approve the initiation of a project (Stage Gate 1, Stage Gate Review governance document)

Yes Yes None

Authority to approve progressing through Stage Gates

Yes Yes None

Authority to approve the Final Completion Certificate Yes Yes None

Change Authority to approve a change in either master schedule or baseline budget for a project

Yes Yes None

2.13.4.3 Compliance Documentation Employees executing contracts and approving transactions are required to ensure that all appropriate approvals and reviews required by this policy and other policies and procedures have been obtained, and to ensure that appropriate documentation of these approvals is maintained. Appropriate documentation can take various forms, including approval forms or memorandums.


3. STAGE GATE PROCESS

A stage gate review process, in general, is a phased project management approach that facilitates fact-based decisions using a set of defined evaluation criteria to govern progress of individual delivery projects. It allows for appropriate management review of project progress and determination of readiness for an individual delivery project to progress to the next phase of work.

This AGDC stage gate review process is intended to ensure that AGDC’s vision and goals are achieved at both the corporate level and the ASAP project level by identifying the objectives of key internal and external stakeholders and providing the framework for an integrated review at each milestone throughout the delivery process. This will promote a holistic and sustainable delivery process in which all components of the project work are in concert with one another and are optimized to perform their function and achieve the strategic goals of AGDC.

Gates provide various points during project progression where an assessment is undertaken of both the quality of the business idea and delivery of the project to date. The AGDC stage gate reviews are intended to address three main concepts:

• Quality of execution: Checks whether the previous phase has been executed in a quality fashion and met the previously agreed mandatory goals for progression to the next stage.

• Business rationale: Ensures the project continues to have a compelling economic and business case that warrants investment in the next stage. This includes determining the appropriateness of the required resources, ensuring the project remains aligned with AGDC vision and goals, engaging stakeholders in defining requirements and ensuring they can be met, providing realistic time and cost estimates for the project, and ensuring that the project is capable of achieving the next stage gate.

• Action plan: Validates that the proposed action plan for the next stage is sound and that the requested resources are reasonable and can be brought to bear in execution of the stage.

The stage gate process identifies a common structure for the individual gates that consist of the following three main elements:

• Deliverables: What the project manager and team must deliver at the completion of the current stage to potentially receive a positive decision to authorize proceeding through the gate to the next stage of the project. These deliverables are decided at the output of the previous gate and are based on a standard menu of deliverables required for successful delivery of a typical project.

• Criteria: Questions or metrics on which the project is judged to determine a result of the gate review and determine whether to proceed with the next stage.

• Outputs: The main result of the gate review is a decision to proceed, rework some additional areas, place the project on hold, or terminate the project. In addition, the process identifies an approved action plan to be completed before arriving at the next gate, along with a list of deliverables and projected timeline for passing through the next gate.


The stage gate review process will provide AGDC with confirmation that project development is progressing satisfactorily, risks are being controlled, scope is being managed, planning is thorough, and organizational commitments to the ASAP project are maintained.

3.1 STAGE GATE PROCESS DESCRIPTION

The AGDC stage gate review process will be applied to all major gas development projects that the AGDC Executive Director and Board authorize. The process has been developed with five major gates that are shown for the ASAP project in Figure 3. The process uses a series of Front End Loaded (FEL) engineering steps to develop the concept into a viable technical and commercial solution. The following are brief descriptions of each individual gate and its purpose within the project execution framework:

• Gate 1 – Concept Approval to Business Development - This gate represents the progression from a sponsor funded concept to the early engineering stages (FEL 1) of a project. This gate focuses on the business case of the concept, including the overall market need and conceptual cost and timing of the project. Cost estimate at this point is of a time is anticipated to be the equivalent of an American Association of AACE Class 5 cost estimate for concept screening. This represents the estimate to have a range of 20% to 50% potential variation below the estimated cost and a 30% to 100% variation above the estimated cost.

• Gate 2 – Business Development to Alternative Selection - This gate represents the progression from very early engineering (FEL 1) into final conceptual engineering (FEL 2), which includes alternative analysis. This gate focuses on the potential engineering solution and a more thorough cost estimate. Cost estimate at this point is of a time is anticipated to be the equivalent of an AACE Class 4 cost estimate for concept screening. This represents the estimate to have a range of 15% to 30% potential variation below the estimated cost and a 20% to 50% variation above the estimated cost.

• Gate 3 – Alternative Selection to Project Definition - This gate represents the progression from final conceptual engineering (FEL 2) into Front End Engineering and Design (or FEED) (FEL 3). This gate focuses on finalizing the reasonable engineering solution, but more importantly validating the commercial need for the project. Cost estimate at this point is of a time is anticipated to be the equivalent of an AACE Class 3 cost estimate for concept screening. This represents the estimate to have a range of 10% to 20% potential variation below the estimated cost and a 10% to 30% variation above the estimated cost.

• Gate 4 – Project Definition to Project Execution - This gate represents the progression from FEED (FEL 3) into project execution. This gate focuses on finalizing both the technical solution and the commercial case, ensuring that the overall business case is valid, the project can be executed, and the return on investment warrants proceeding with the project. Cost estimate at this point is of a time is anticipated to be the equivalent of an AACE Class 2 cost estimate for concept screening. This represents the estimate to have a range of 5% to 15% potential variation below the estimated cost and a 5% to 20% variation above the estimated cost, allowing reasonable budgeting certainty prior to authorizing the project execution.

• Gate 5 – Project Execution to Operations - This gate represents the progression from project execution into operations. This gate focuses on ensuring that construction has been completed and the operating organization is prepared to receive, commission and start-up the new capabilities.

3 STAGE GATE PROCESS


Progression through each gate is determined by the approval forum, which will establish whether the project has satisfactorily completed all tasks and provided the information required for the relevant stage. Figure 1 outlines the stage gate review process flow.

Figure 1. Stage Gate Review and Approvals for the ASAP Project

STATE FUNDING

GATE (Class 5

Estimate*)

OPEN SEASON; FEL 3

FUNDING GATE

(Class 4 Estimate*)

PROJ SANC

GAT (Clas

Estim

FEL 1 Business

Development

Concept Evaluation

Phase Review

Go/No Go Mid - 2010

Phase Review

Go/No Go Mid - 2011

Phase Review

Go/No Go Early 2015

Phas Revie

Go/No Early 2

TECHNOLOGY AND

BUSINESS IDEAS


Figure 2. Stage Gate Review Process

3.2 APPROVALS

At each gate, the initiator prepares, compiles, and submits the required documents to the identified reviewers. The reviewers review these documents, compile their comments into a review form and provide a decision using the following criteria: ‘rejected’, ‘approved as noted’, or ‘approved’; these are described as follows:

• Rejected: The initiator responds, corrects, and resubmits the document. In all cases, submittal to the approval forum is not allowed if any of the documents is ‘rejected’ by the reviewers.

• Approved as Noted: The initiator responds, corrects, and resubmits the document(s) to the reviewers either before submittal to the approval forum can go forward or during the subsequent stage of the process. This timeframe shall be determined by the reviewers.

• Approved: The reviewers will not require a response or correction. Some documents shall be ‘approved’ with no exception to proceed with the submittal to the approval forum; these documents are identified herein.

Once the review process is completed and all documents are deemed acceptable by the reviewers, the initiator will then seek the approval to proceed to the next stage from the approval forum. At this point, there are three possible gate review decisions: ‘proceed’, ‘cancel’ or ‘hold’. Each gate review decision type is described as follows:

• Proceed: This occurs when goals for the previous stage are met; technical, market, financial, and operational information has met expectations; and funding is approved for the next stage.



• Cancel: This typically occurs when the project is not progressing as it should because the market has shifted or the desired objectives (i.e., investment) cannot be met.

• Hold: This typically happens when the goals cannot be met at this point. The project will be suspended for a specified period and the criteria will be re-evaluated at a future date.

3.3 APPROVAL AND REVIEW AUTHORITIES

The main delivery entities for the ASAP project involves a combination of personnel dedicated to the ASAP PMT and personnel within AGDC corporate entities. These personnel represent a combination of the review and approval personnel working with the Project Director for ASAP to prepare stage gate deliverables. Table 5 describes the review and approval authority responsibilities for the ASAP project in accordance with this process:

Table 3. Stage Gate Review and Approval Authority

Review or Approval Authority Responsible Position

Initiator ASAP Project Director

Reviewer – Project Initiation and Authorization AGDC PMO Director

Reviewer – Project Economics AGDC Financial Director

Reviewer – Commercial AGDC Commercial Manager

Reviewer – Front End Loading Engineering AGDC PMO Director

Reviewer – Project Planning, Execution and Control

AGDC Commercial Manager

Reviewer – Commissioning and Start-up AGDC PMO Director

Reviewer – Operations and Maintenance AGDC Operations & Maintenance Manager

Approval Authority AGDC President

Approval Forum AGDC Board of Director

3.4 STANDARD GATE REVIEW CRITERIA

This section describes the major elements of the gate review process, by functional area. It includes a standard listing of requirements in that functional area progressing in detail and extent of completion as needed as the project develops across the five individual stage gates.

3.4.1 Project Initiation and Authorization

This functional area ensures that the appropriate level of initiation efforts are undertaken on the project to lay the foundation for project success. Table 6 shows the individual elements across the five stage gates.

Table 4. Project Initiation and Authorization Stage Gates

Activity Description / Deliverable

Gate 1 Concept to

FEL 1 Gate 2

FEL 1 to FEL 2 Gate 3

FEL 2 to FEL 3

Gate 4 FEL 3 to

Execution

Gate 5 Execution to Operations



Gate 1 Concept to

FEL 1 Gate 2


FEL 2 to FEL 3

Gate 4 FEL 3 to

Execution


Project Charter

Business Objective / Business Driver(s)

Conceptual Preliminary Firm Finalized

Project Scope / Project Objectives

Conceptual Defined Finalized

Project Specific Risks High Level Qualitative

Analysis Quantitative

Analysis

Commercial Strategies Conceptual Preliminary Firm Finalized

Communication Preliminary Detailed Finalized

Stakeholder Management Preliminary Detailed Finalized

Integrated Project Team Team Strategy Core Staffing

Organization / Responsibilities / Staffing

Conceptual Detailed w/names

Finalized w/names Finalized w/names

Charter Approval Developed Updated Final Sign-Off

Authorization of Funding

Authorization to Proceed Request Prepared for FEL 1

Prepared for FEL 2

Prepared for FEL 3 Prepared for Execution

Prepared for Operations

Major Schedule Milestones Conceptual Detailed Confirmed Finalized

Preliminary cost and Economic Assessment

Developed Updated Updated Finalized

Capital Cost Estimate and Estimate Basis


Economic Model and Sensitivity Analysis


Results from Current Phase Conceptual Report

FEL 1 Summary

FEL 2 Summary

FEL 3 Summary

Execution Summary

Project Execution Plan for Next Phase

Preliminary Finalized Updated

Work Scope for Next Phase Conceptual Detailed Confirmed Finalized

Key Assumptions and Constraints


Risk Assessment and Risk Response Plan

Developed Updated Finalized

Exit Strategy for Next Phase AFE for FEL 1 AFE for FEL 2 AFE for Project Sanction

3.4.2 Project Economics

This functional area ensures that the economics of the project warrant the risk of project execution and the overall cost of the project. Table 7 shows the individual elements across the five stage gates.

Table 5. Economics Stage Gates


Gate 1 Concept to

FEL 1

Gate 2 FEL 1 to

FEL 2 Gate 3

FEL 2 to FEL 3

Gate 4 FEL 3 to

Execution


Cost of Service Models (Pipeline, LNG Facility, Shipping)

Conceptual Updated Detailed Part of Estimate

Finalized for Sanction



Margin Sensitivity Analysis (Market Price Dynamics and Price Curve)

Conceptual Updated Finalized for Sanction

Financial Risk Analysis Conceptual Preliminary Updated Implemented

3.4.3 Commercial Agreements

This functional area ensures that the commercial agreements are in place to support the operation of the eventual facilities delivered by the project. Table 8 shows the individual elements across the five stage gates.

Table 6. Commercial Agreements Stage Gates


Gate 1 Concept to

FEL 1

Gate 2 FEL 1 to

FEL 2

Gate 3 FEL 2 to

FEL 3

Gate 4 FEL 3 to

Execution


Build-Own-Operate Agreement (if BOO)

Developed Executed

Operate Agreement (if BO) Developed Executed

Gas Supplier Agreements Executed

Tariff Determination Developed Preliminary Tariff

Approved Final Tariff Approved

3.4.4 Front End Loading Engineering

This functional area ensures that the engineering necessary to support project development is completed in a phased approach with eventual detailed engineering of needed facilities. Table 9 shows the individual elements across the five stage gates.

Table 7. Front End Loading Engineering Stage Gates


Gate 1 Concept to FEL

1

Gate 2 FEL 1 to FEL 2


Gate 4 FEL 3 to

Execution


Project Data / Owner’s Requirements

Project Process Description Narratives

Conceptual Updated Detailed

Plant Operating Philosophy and Turndown Criteria Conceptual Detailed Finalized

Production Rate / Name Plate Capacity

Conceptual Detailed Finalized

Feed Characteristics and Product Specifications


Design Life Expectancy Conceptual Reviewed for Project Finalized

General Specifications (all disciplines)

Preliminary Developed Implemented

Reliability and Maintenance Philosophy

Conceptual Detailed

Spare Parts / Equipment Philosophy

Conceptual Detailed

Facility Location / Battery Limits


Space Allowances for Future Expansion

Conceptual Preliminary Finalized





1



Gate 4 FEL 3 to

Execution


Synergies with Other Facilities. Services, Operations

Preliminary Complete

Infrastructure Requirements Conceptual Preliminary Defined

Studies, Testing, Field Work Undertaken During Phase

Confirmed

Soils, Hydrology, Meteorological Conditions, etc.

Preliminary Data Gathering

Confirmatory Efforts Updated for Front-End

Engineering and Design (FEED)

Engineering Deliverables by Phase

General Specifications / Design Criteria

Identified Maintain Current

Maintain Current

Description of Selected Process(es) / Options Considered

Defined (as required)

Schedule A Package

Licensor(s) and Proprietary Technology Package

Defined (as required)

Schedule A Package (as required)

Process Design Deliverables Preliminary Complete

Process Conditions / Operating Conditions


Block Flow Diagrams Preliminary Complete/IFD

Process Flow Diagrams Preliminary Complete/IFD

Energy and Mass Balances Preliminary Complete

Start-Up / Shut-Down Conditions

Started 90% Complete Complete

Piping and Instrumentation Diagrams (P&IDs)

Preliminary Issued for Review IFD

Process Utility Requirement Preliminary Complete

Utility Flow Diagrams Preliminary Issued for Design Complete

Equipment Selection Identified Finalized Procurement

Process and Utility Equipment List

Options Identified Selection Finalized Procurement

Equipment Selection Criteria Preliminary Complete

Process Equipment Specs and Data Sheets

Preliminary Updated Complete

Utility Equipment Specs and Data Sheets


Material Selection Studies / Reports

Preliminary Finalized

Equipment Spare Parts List Preliminary Finalized

Mechanical / Piping Design and Layout Deliverables


Plot Plans / Key Plans Preliminary Complete

Equipment Arrangement Drawings / Layout

Preliminary Issued for Design Complete

3-D Model Development (30% Review Level)







1



Gate 4 FEL 3 to

Execution


Tie-in List and Locations Line Lengths Complete

Line Lists and Designation Tables


Stress Analysis Preliminary Complete

Corrosion Mapping Preliminary Complete

HVAC Preliminary IFC

Insulation and Heat Tracing Preliminary Complete

Painting and Protective Coatings


Power and Electrical Distribution Deliverables

Started Complete

Electrical One-Line Drawings Started Complete

Electrical Load Studies Preliminary Complete

Power Equipment List (Transformers, Switchgear, Motors, etc.)


Electrical Discipline Drawings (Lighting, Power Distribution)


Instrumentation and Process Controls Deliverables

Preliminary Defined Complete

Operating and Control Philosophy

Identified Defined Complete

Control Logic Narratives and Keys


Distributed Control System Architecture

Defined Complete

Instrumentation Redundancy Philosophy

Preliminary Defined Complete

Instrument Index Started Complete

Instrumentation and Control Specifications and Data Sheets

Identified Complete

Protective Instrument Systems

Identified Complete

Relief Philosophy / Relief Valve Calculations


Civil, Structural, and Architectural Deliverables

Site Plan

Developed Preliminary Complete

Site Plans and Contours Civil Works IFD Civil Works

IFC

Civil Drawings Conceptual Preliminary IFC

Structural Drawings Sizes and Profiles Specs Finalized IFC

Architectural Drawings Defined Early Works IFC

Infrastructure Deliverables Started Permitting Underway Complete

Regulatory Approvals and Permitting Plan

Complete





1



Gate 4 FEL 3 to

Execution


Permitting Matrix Defined Complete

Conservation and Reclamation Plan

Submitted

Assessment for Approval

Approved Assessment from Regulatory Authority

Environmental Approval / Permits

Field Work Compl Report Updated Complete

Environmental Checklist

Dismantling, Demolition Plan Plans Prepared Earl Works AFC Complete

Dismantling and Demolition Deliverables

Defined Implemented

Technical Reviews

Design Reviews Preliminary Updated Complete

Process Design Review Preliminary PHA Review Complete

Environmental Review Complete for Gate 3

P&ID Review Preliminary PHA Review Complete

Constructability Review 30% Model Rev Complete Complete

3-D Model Review(s) Preliminary Review Complete

Project Safety Review / Process Hazards Analysis


Reliability and Asset Management Studies


3.4.5 Project Planning, Execution, and Control

This functional area ensures that the planning, execution and controls necessary to support project development are in place to support project development and eventual execution. Table 10 shows the individual elements across the five stage gates.

Table 8. Project Planning, Execution, and Control Stage Gates


Gate 1 Concept to

FEL 1 Gate 2



FEL 3 to Execution


Project Schedule

Master Summary Schedule Conceptual Preliminary Detailed Finalized for Execution

Milestone Schedule Conceptual Preliminary Detailed Finalized for Execution

Critical Path Analysis By Phase

Detailed for FEED Detailed for Execution

Integrated Critical Path Schedule

Detailed for FEED Detailed for Execution

Early Works, Shutdown, Tie-In Plan and Schedule


Schedule System Implementation

Ad hoc Defined Implemented





Gate 1 Concept to

FEL 1 Gate 2



FEL 3 to Execution


Reporting Requirements Ad hoc Defined Implemented

Project Organization

Organization Model Development

Conceptual Detailed Implemented

Governance Organization Chart and RACI Chart

Conceptual Detailed Implemented

Owner Organization - Key Positions filled

Sponsor Positions

Leadership Positions

All Positions

PMC Labor Requirements and Availability

Key Positions Specialist Positions

Human Resources Strategies


Training Requirements / Education Plan and Delivery Program

Conceptual Finalized Implemented for O&M

Stakeholder Relations

Stakeholders Relations Plan

Conceptual Detailed Fully Implemented Updated

Government Relations Conceptual Detailed Fully Implemented Updated

Communications

Communications Plan Detailed Fully Implemented Updated for Execution

Updated for O&M

Meetings Schedule (Type, Purpose, Frequency)

Defined for Phase Defined for Phase Defined for Phase Defined for Phase

Project Reporting Requirements

Detailed Fully Implemented Updated for Execution

Updated for O&M

Information Management Technology

Information Technology Plan

Conceptual Detailed Fully Implemented

Approved Software for Business/Project Execution

Conceptual Detailed Fully Implemented Implemented for O&M

Document Control SharePoint Implemented

Detailed System Analysis

System Implementation Long-Term System Implemented

Automation Plan and Communications System Architecture

Conceptual Acquired/Functioning Training Provided

Quality Management

Quality System Conceptual Detailed Fully Implemented

Quality Assurance Standards and Procedures

Defined in PEP Updated/Finalized Updated/Finalized for O&M

Quality Audit Program Developed Implemented Audits Per Schedule Audits Per Schedule

Inspect and Test (Plan and Program)

Developed Implemented Surveillance Per Schedule

Non-Conformance System Defined Updated/Finalized




Gate 1 Concept to

FEL 1 Gate 2



FEL 3 to Execution


Cost Estimate and Project Control Base

Work Breakdown Structure (WBS)


Cost Breakdown Structure (CBS)


Estimate Development Plan


Total Installed Cost Estimate

Conceptual AACE Class 4 AACE Class 3 AACE Class 2

Escalation Considerations Budgetary Complete

Cost Risk and Contingency Allowances

Percentage Detailed Analysis

Schedule Risk and Contingency Allowances

Percentage Detailed Analysis

Owner's Costs ROM Conceptual

Owner's Team (Labor, Expenses, Services)

Preliminary Definitive

Provision for Cost of Spare Parts

Preliminary Definitive Purchased

Commissioning and Startup Costs

Preliminary Definitive Completed

Operating Costs for First and Subsequent Years

Preliminary Definitive Budgeted

Land Acquisition and Concessions

ROM Conceptual Definitive

Cost Control and Reporting Requirements

Defined in PEP Implemented

Contingency Management Plan

Developed

Accounting and Financial Plan

Invoice Payment Process Defined in PPM

Financial Reporting Process

Asset Information Delivery Plan

Defined in DBM Implemented

Code of Accounts Defined in PPM

Post Investment Review Preliminary Plan Plan Finalized Plan Implemented

Risk Management

Risk Identification and Assessment

Plan Implemented Updated

Risk Register Developed Updated and Current Updated and Current

Project Risk Mitigation Plan

Defined Updated Implemented as Necessary

Business Continuity Plan and Disaster Recovery

Defined Updated Implemented as Necessary





Gate 1 Concept to

FEL 1 Gate 2



FEL 3 to Execution


Change Management

Change Management Plan Implementation

Change Management Process

Developed Functioning per Plan

Change Identification, Notification, and Approvals

Developed Functioning per Plan

Change Order Register Initiated and Current with

Progress Current with Progress Current with

Progress

Value Improvement

Value Improvement Program / Practices

Implemented

List of VIP Practices Implemented / Results

Recorded Updated

Value Engineering Completed

Lessons Learned Review / Adopted

Implemented Recorded Updated

Engineering Management Plan

Engineering Strategy and Approach

Documents Aligned Turnover Docs Defined

Engineering Execution Plan (Detailed by Phases)

Updated for FEED Defined for EP

Scope of Work Descriptions by Discipline and EWPs

Prepared for FEED Prepared for EP

Manpower Loading and Performance "S" Curves

Determined for FEED Determined for EP

List of Engineering Deliverables Quantified for Next Phase

Prepared for FEED Definitive for EP

Engineering Support for Procurement and Contracting

Estimated for FEED Definitive for EP

Field Engineering Support Determined for EPC

Procurement and Contracting Plan

Procurement Plan Conceptual Strategy Procurement Plan Updated and Implemented for LLE

Regional and Community Engagement Strategy

Preliminary Defined

Field Procurement Plan and Responsibilities Matrix

Finalized for EPC

Long Lead Equipment Strategy

Defined Bid Cycle Underway

Bulk Material Strategy Conceptual Defined

Expediting Plan Conceptual Prepared Implemented

Vendor Inspection/Quality Assurance Plan

Conceptual Prepared Implemented




Gate 1 Concept to

FEL 1 Gate 2



FEL 3 to Execution


Contract Administration Plan

Program Defined Finalized for EPC

Contractor Performance Management


Construction Management Plan

Construction Execution Plan

Developed Plan Updated Finalized

Construction Management Organization

Const Mgr Hired Key CM Positions

Construction Manpower Forecast / Availability

Survey Conducted Loading Curves Avail

Temporary Facilities and Services Plan


Prefabrication and Modularization Plan


Materials Management Plan

Materials Management System


Transportation and Logistics Plan


Receiving, Inventory Control and Disbursements


Disposal Plan (Salvaged and Surplus Equipment and Materials)

List and Plan Developed Implemented

Spare Parts Plan Requirements

Defined Finalized

Health, Safety, Security, and Environmental Plan

Safety Management Plan Draft Prepared Approved Implemented

Emergency Response / Site Security Plan

Draft Prepared and Approved Implemented

Permitting Plan Conceptual Detailed Updated Implemented

Environmental Management Plan

Developed Approved Implemented

Environmental Management System

Permit Requirements

Developed and Incorporated

Implementation for Construction

Implementation for O&M

3.4.6 Commissioning and Start-up

This functional area ensures that the necessary operational personnel and tools are in place to support turnover, commissioning, start-up and eventual operations and maintenance of facilities delivered by the project. Table 11 shows the individual elements across the five stage gates.



Table 9. Commissioning and Start-up Stage Gates


Gate 1 Concept to

FEL 1

Gate 2 FEL 1 to FEL

2

Gate 3 FEL 2 to

FEL 3

Gate 4 FEL 3 to

Execution


Commissioning and Start-up (C&SU) Plan

Preliminary Updated Completed

Implementation

C&SU Objectives Preliminary Complete

C&SU Cost and Schedule Preliminary Complete

C&SU Organization with RACI O&M Review Complete

First Hired C&SU Team in Place

C&SU Execution Developed Finalized Implemented

C&SU Systems Scoping and Sequencing


C&SU Procurement and Installation Plan


C&SU Quality Assurance/Quality Control Plan

Prepared

C&SU Procedures Development Plan Preliminary Prep in Progress Finalized

Vendor Field Support Preliminary Finalized

Operator Training Plan Developed Implemented

C&SU Spare Parts Plan Requirements Defined

Materials on Site

C&SU Systems Turnover Plan Defined Developed Implemented Implemented – Start-up

Reliability and Preventative Maintenance

Developed Implemented

3.4.7 Project Completion and Close-out

This functional area ensures that the project completion is verified and the overall project closed out upon transition to operations. Table 12 shows the individual elements across the five stage gates.

Table 10. Project Completion Stage Gates


Gate 1 Concept to

FEL 1

Gate 2 FEL 1 to

FEL 2

Gate 3 FEL 2 to

FEL 3

Gate 4 FEL 3 to

Execution


Demobilization Plan / Site Clean Up (Waste / Documents)

Conceptual Updated Implemented Completed

Financial Close-Out Requirements / Plan Plan Finalized Implemented

Claims and Dispute Resolution Plan Program Defined Implemented

Transfer of Project Records (Detailed Plan) Preliminary Updated Implemented

Administrative Closure Implemented

Registration Requirements with Approval Authorities

List Prepared Process Implemented

Project Completion Report Contents Defined List Prepared Completed

Project Close-Out Report Recorded

Transfer Warrantees

Lessons Learned Captured and Recorded Recorded


Table 10. Project Completion Stage Gates


Gate 1 Concept to

FEL 1

Gate 2 FEL 1 to

FEL 2

Gate 3 FEL 2 to

FEL 3

Gate 4 FEL 3 to

Execution


Project Metrics Prepared and Analyzed

Anchorage/Juneau/Fairbanks I. CALL TO ORDER II. ROLL CALL · • Longer term: 30-year levelized vs....

Documents

Transcript of Anchorage/Juneau/Fairbanks I. CALL TO ORDER II. ROLL CALL · • Longer term: 30-year levelized vs....