AIDEA buying FNG to move gas

AIDEA said Jan. 28 that, in conjunction with Gov. Bill Walker, it has signed a letter of intent to purchase Pentex Alaska Natural Gas Co. LLC and its assets, including Fairbanks Natural Gas.

The Alaska Industrial Development and Export Authority said it would immediately commence due diligence on the proposed Pentex purchase at the letter of intent price of $52.5 million. AIDEA said that if its board approves the purchase, the investment would enable it to “effectively advance the goal of bringing affordable natural gas to Interior Alaska” and said its acquisition of Pentex would promote an integrated gas distribution system that can be built and operated in a more efficient manner for the benefit of Fairbanks and North Pole residents and businesses.

Fairbanks Natural Gas delivers trucked liquefied natural gas from Cook Inlet to Fairbanks, serving some 1,120 customers.

A second gas distribution utility, the Interior Gas Utility, certified by the Regulatory Commission of Alaska in late 2013, will serve customers in both Fairbanks and North Pole, beginning with deliveries in North Pole in 2016 and expanding its distribution system to serve as many as 12,000 customers by 2027.

Hilcorp Alaska LLC subsidiary Harvest Alaska LLC is in the process of purchasing the Titan Alaska LNG facility at Port Mackenzie, with plans to expand the facility, a purchase announced in November. Titan and FNG are both subsidiaries of Pentex.

In a Jan. 29 statement Harvest said the AIDEA announcement was “unexpected,” but that Hilcorp and Harvest “share the desire to get cleaner, more affordable energy to the Interior as soon as possible,” and said the companies look forward to collaborating with AIDEA and the state on the effort.

“We don’t fully understand yet how this will affect our existing agreement to purchase the Point Mackenzie LNG facility, but we think Harvest is the best candidate to own, operate and quickly advance efforts to expand LNG deliveries to the Alaskan Interior. In fact, we are working on plans that could provide incremental LNG capacity within 18 months,” Harvest President Sean Kolassa said in a statement.

Gov. Bill Walker said, “It is important that we keep our eye on the immediate goal of bringing energy relief to Interior Alaska. AIDEA’s initiative to help streamline gas distribution systems in the Interior is a positive development.”

AIDEA Board Chairman Dana Pruhs said “Pentex, under AIDEA ownership, will work closely with the community and utilities to reduce construction and operation costs for both natural gas distribution systems. This efficient approach will lead to lower cost energy for consumers.”

- Kristen Nelson