Title 15 . Revenue

Chapter 55 . (Repealed)

Section 173. Prevailing value for gas

15 AAC 55.173. Prevailing value for gas

(a) For gas, other than NGLs, delivered in the Alaska North Slope area, the prevailing value per Mcf is 10 percent of the prevailing value per barrel that would be determined under 15 AAC 55.171(g) for oil that is produced from the lease or property from which the gas is produced and that is sold at the entrance to the publicly regulated oil pipeline serving that lease or property. If during the month that the gas is delivered oil is not produced from that lease or property and delivered into a publicly regulated oil pipeline serving that lease or property, the prevailing value calculation must be made with respect to the nearest lease or property from which oil is produced and delivered that month into a publicly regulated oil pipeline.

(b) For gas, other than NGLs, delivered in the Cook Inlet area during a calendar quarter, the prevailing value is the weighted average price of significant sales of gas from producers of gas to publicly regulated utilities in the Cook Inlet area for the three month period ending one month before the end of the previous calendar quarter. The department will publish on the 15th day of each calendar quarter the prevailing value for that quarter. For purposes of this subsection, "significant sales" means sales of 10,000 Mcf per month or more.

(c) For gas, other than NGLs, delivered in a foreign market, the prevailing value for the month of production of that gas is the weighted average sales price of all gas from the state sold in arm's-length, third party transactions in the month of delivery in the same market.

(d) For gas, other than NGLs, delivered in the United States outside the state, the prevailing value for the month of production of that gas is the weighted average sales price of all gas from the state sold in arm's-length, third party transactions in the month of delivery in the same market.

(e) For gas, other than NGLs, produced and either used by the taxpayer as fuel or feedstock in the production of urea or ammonia or exchanged on a volumetric basis for other gas used by the taxpayer as fuel or feedstock in the production of urea or ammonia, the prevailing value at the urea or ammonia plant is $1.30 per Mcf, as adjusted for the current month by multiplying $1.30 per Mcf by a fraction whose numerator is the average ammonia price for the previous three calendar months and whose denominator is $130 per short ton (2,000 pounds). For purposes of this subsection, the average ammonia price means the simple numerical average, for the three calendar month period immediately preceding production, of the weekly mid-point domestic prices per short ton (2,000 pounds) of anhydrous ammonia F.O.B. the United States Gulf Coast as reported in the table entitled "Green Markets Price-Scan U.S. Domestic Spot Quotes" in the publication Green Markets .

(f) The prevailing value for NGLs, other than NGLs that are commingled with oil before being tendered to a common carrier pipeline or before being transported from the lease or property, will be determined by the department on a case-by-case basis under AS 43.55.020 (f).

(g) A producer that sells gas in the Cook Inlet area or outside the state shall, at the time the producer files a production tax return, file a copy of the sales invoice for each transaction for the month covered by the return and a copy of any contract for the transactions that the producer enters into during the month covered by the return.

(h) Repealed 1/1/2000.

History: Eff. 1/1/95, Register 132; am 1/1/2000, Register 152; am 1/1/2003, Register 164

Authority: AS 43.05.080

AS 43.55.020

AS 43.55.030

AS 43.55.040

AS 43.55.110

Editor's note: Green Markets is published by Pike & Fischer, Inc., 4600 East-West Highway, Suite 200, Bethesda, Maryland 20814.