FNG gets Cook Inlet supply extension

Fairbanks Natural Gas LLC recently extended its Cook Inlet supply contract by one year.

The extension now gives the Fairbanks gas distribution utility until May 31, 2014, to switch its supply source to the North Slope, the company recently told regulators.

In March, the Regulatory Commission of Alaska granted Fairbanks Natural Gas-affiliate Polar LNG LLC a certificate to build and operate a common carrier pipeline at Prudhoe Bay that would eventually feed a liquefied natural gas plant to be built at Deadhorse.

Polar LNG recently applied for a pipeline right-of-way lease from the State Pipeline Coordinator’s Office. The pipeline would run some 3.5 miles from Flow Station 1 at the Prudhoe Bay unit to the Polar LNG Pas, formerly known as Child’s Pad) in Deadhorse.

Fairbanks Natural Gas currently trucks LNG north from Cook Inlet, but in early 2008 secured a 10-year contract to buy North Slope gas from an ExxonMobil subsidiary.

The Cook Inlet supply currently serves as a feedstock for an LNG facility at Point MacKenzie. Fairbanks Natural Gas currently trucks LNG north along the Parks Highway.

While Fairbanks Natural Gas and Polar LNG work to bring the project online, Golden Valley Electric Association and Flint Hill Resources Alaska are also considering a plan to truck LNG from the North Slope to the Interior starting in early 2014. The Polar LNG project would likely require big anchor customers like the power utility and the refinery.

—Eric Lidji