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Providing coverage of Alaska and northern Canada's oil and gas industry
July 2017

Vol. 22, No. 29 Week of July 16, 2017

End of road for Alaska gas utility

In a June 30 order the Regulatory Commission of Alaska revoked the certificate of public convenience and necessity issued to Alaska Intrastate Gas Co., a utility with plans to supply natural gas to 17 Alaska coastal communities. The Alaska Public Utilities Commission, RCA’s predecessor agency, originally issued the certificate in 1998. But, with AIGC having failed for 18 years to secure the necessary investment to put its plans into operation, RCA has finally decided that the company has not demonstrated the financial capability to provide a gas utility service to the public.

AIGC told the commission that an investment company had committed to the financing of a gas distribution system for the relevant communities. But, in testimony to the commission, the investment company said that there was no binding commitment to the funding, the RCA said in its order revoking AIGC’s certificate.

As originally envisaged, AIGC’s plan involved shipping liquefied natural gas by barge from Canada to the communities of Angoon, Cordova, Craig, Haines, Juneau, Kake, Ketchikan, Klawock, Klukwan, Kodiak, Metlakatla, Petersburg, Sitka, Skagway, Valdez, Wrangell and Yakutat. The company was going to build the necessary infrastructure for the distribution of gas in the communities.

This plan later morphed into a concept of supplying synthetic natural gas in the form of a mixture of propane and air. The propane would be delivered in liquefied form to communities by barge. The propane would then be gasified and mixed with the appropriate proportion of air before being fed into an underground pipe system for distribution to consumers.

In an October 2016 filing with RCA, AIGC said that it had plans in place to move forward with its project and that the liquid propane for the gas supply would initially come from the port of Prince Rupert, British Columbia. But, in the absence of firm financing for the project, the RCA has decided that the company has had sufficient time to develop its concept and that the time has come to give other entities the opportunity to provide gas services in the relevant communities.

- ALAN BAILEY






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