AIDEA defers decision on Pentex purchase

On May 19 the board of the Alaska Industrial Development and Export Authority decided to postpone until May 27 its decision over the purchase of Pentex Natural Gas Co. AIDEA says that there are technical aspects of the negotiations over the purchase that must be completed before resolutions for the purchase decision can be voted on.

In late January AIDEA agreed on the potential purchase of Pentex as part of the Interior Energy Project, a project designed to bring affordable energy to Fairbanks and the surrounding area of the Alaska Interior. Pentex owns a liquefied natural gas plant near Port MacKenzie on Cook Inlet; a trucking operation for shipping LNG from the LNG plant to Fairbanks; and Fairbanks Natural Gas, one of the two gas utilities in the Interior city. Pentex is in the process of completing the sale of the LNG plant and the trucking operation to Harvest Alaska, a subsidiary of Cook Inlet gas producer, Hilcorp Energy.

AIDEA has said that its objective in purchasing Pentex is to gain ownership of Fairbanks Natural Gas and hence pave the way to reducing gas prices in Fairbanks through AIDEA's relatively low business expenses and, eventually, by facilitating the merger of the two existing Fairbanks gas utilities into a single entity with an integrated operation.

As a separate component of the Interior Energy Project, AIDEA is investigating options for a reliable supply of natural gas to Fairbanks at an affordable price. And, meantime, work is in progress, expanding the gas distribution network in Fairbanks, in anticipation of the gas supply coming to fruition.

AIDEA has been conducting due diligence on the Pentex purchase, to make sure that the terms and conditions of the sale are acceptable before a final decision on completing the deal.

- Alan Bailey