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LNG pipeline gets RCA certificate
State regulators have given the go-ahead for a small North Slope natural gas pipeline.
The Regulatory Commission of Alaska on March 9 gave Polar LNG LLC a certificate to build and operate a 3.8-mile pipeline from Flow Station No. 1 in the Prudhoe Bay unit to the Polar pad in Deadhorse, where Polar plans to build a liquefied natural gas plant.
Polar plans to truck LNG from the proposed Deadhorse plant to the existing gas distribution facilities in Fairbanks owned and operated by its affiliate Fairbanks Natural Gas LLC. The two companies are both owned by Pentex Alaska Natural Gas Co. LLC.
Competing proposal The approval allows Fairbanks Natural Gas to move forward on its long-in-the-works effort to switch its natural gas supply source from Cook Inlet to the North Slope, but the company must still contend with a competing LNG trucking proposal from two of its potential customers: Golden Valley Electric Association and Flint Hill Resources.
Fairbanks Natural Gas is currently contracted for supplies from Cook Inlet through mid-2013, but in early 2008 the company signed a 10-year deal to buy Prudhoe gas from ExxonMobil and the following year it leased state land nearby for its proposed plant.
Objection from Norgasco The certification effort hit some bumps last fall after Norgasco Inc., a local distribution company for industrial users in the region, argued that it should be the one to move the gas to the plant instead of Polar LNG. While the RCA did not allow Norgasco to join the case, it did entertain some of its questions about potential service duplication, and the cost and ownership of the project, and asked Polar LNG to say why it should be a common carrier pipeline and not a public utility, whether the plant would be regulated, whether Polar LNG would operate a distribution utility in Deadhorse, among other issues.
Although Polar answered the questions, the RCA determined “the record in this proceeding is insufficient to answer commission questions,” but “we do have a sufficient record to evaluate whether Polar has met the standard for issuance of a certificate.”
Polar LNG will be required to file a tariff application 90 days before starting service.
—Eric Lidji
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