Parnell approves Interior LNG project

Gov. Sean Parnell approved a $362.5 million legislative package May 29 that paves the way for a liquefied natural gas trucking operation from the North Slope to the Interior.

Senate Bill 23 gives the Alaska Industrial Development and Export Authority the authority to provide up to $275 million in low-interest financing for a North Slope liquefaction plant and a gas distribution system in the Fairbanks North Star Borough.

The package also includes a $57.5 million capital appropriation to defray the cost of energy for homes and businesses. The project will also be able to take advantage of up to $30 million gas storage tax credits approved during a previous legislative session.

“By putting in place a financing package for natural gas liquefaction and distribution, communities throughout Alaska will benefit,” Parnell said in a prepared statement from Fairbanks, where he signed the bill. “Not only will an Interior gas distribution system help bring down energy costs in the short term, but it builds the necessary infrastructure for these communities to be able to take advantage of an Alaska gas line in the future.”

AIDEA review needed

The goal is to get the system in place soon, perhaps by the end of 2015.

Among the initial hurdles that must be overcome before the project can move forward is designating the players for the distribution system that would bring gas to burner tips.

Fairbanks Natural Gas LLC currently operates a distribution system within the city of Fairbanks and has asked regulators to expand its service area to include the city of North Pole, Eielson Air Force Base and other less-densely populated corners of the borough.

The municipally owned Interior Alaska Natural Gas Utility has asked the Regulatory Commission of Alaska for an initial service area covering essentially the same area and has asked RCA to consolidate the cases because they “concern substantially identical issues” and would cover similar areas.

—Eric Lidji