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Vol. 12, No. 22 Week of June 03, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Tanana interested in ANGDA propane idea

Alan Bailey

Petroleum News

The Alaska Natural Gas Development Authority has long been promoting the use of propane from the North Slope as a fuel that can alleviate the pain of escalating diesel fuel bills in rural Alaska. And, to help set the propane wheels in motion, the authority has been championing a propane demonstration project, to test the cost and feasibility of using propane in villages along the Yukon River in Alaska’s Interior (see “Propane demo in works” in the Dec. 31 edition of Petroleum News).

The demonstration project would involve trucking propane from the North Slope to the Yukon River, to try distributing the propane to some villages to test the use of propane as an energy source in some village facilities. If propane use proves workable, it would be possible to extract the fuel from a future North Slope gas pipeline, at the point where the gas line crosses the Yukon, the authority thinks.

Formal request

The village of Tanana has formally requested to become involved in the demonstration project, ANGDA Chief Executive Officer Harold Heinze told Petroleum News on May 23. Apparently, the village has facilities that could use propane as a fuel on an experimental basis.

“They have voted to definitely become part of the demonstration project and support it,” Heinze said.

ANGDA Administrative Officer Corrie Young told the ANGDA board on May 9 that she had floated the demonstration project idea at the Rural Energy Conference in Fairbanks in April and Tanana had expressed an interest at that time.

Heinze told the board that although the volumes of propane potentially involved in a full implementation of the idea — probably less than 10,000 barrels per day — would be quite modest, the impact on village energy costs could be very significant.

Positive impact

“Our interest here is … the very positive impact that North Slope gas can have in helping 100 villages over a long time,” Heinze said. “… We’re playing for big stakes on this one.”

Heinze said that the impact on the cost of operating village Laundromats, key components of village infrastructure, could be particularly dramatic. The propane could provide both heat and electricity for hot water and drying clothes.

But ANGDA wants an entity other than itself to manage the project. The project will also require funding, perhaps from an organization such as the Denali Commission or from the State of Alaska. ANGDA will be meeting with Doyon Ltd., the Alaska Native regional corporation for the central part of Interior Alaska, to discuss the project, Heinze told Petroleum News.



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