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North Slope LNG plant expected to start operations in September
Alan Bailey for Petroleum News
During a June 3 board meeting of Fairbanks based Interior Gas Utility, Clay Beethe from Hilcorp Alaska told the board that the LNG plant that Hilcorp affiliate Harvest Alaska LLC is constructing on the North Slope is now anticipated to begin commercial operations at the beginning of September. The plant will supply LNG to IGU. First LNG production, on a test basis, is expected in July, Beethe said.
LNG for Fairbanks IGU stores LNG in tanks in central Fairbanks and North Pole in support of its expanding number of natural gas customers in the Fairbanks region. Currently, the LNG is transported to Fairbanks by road from IGU's LNG plant near Point Mackenzie on the Cook Inlet. Hilcorp supplies gas to the LNG plant from its Cook Inlet gas fields.
However, given pending shortages in firm Cook Inlet gas supplies, in 2023 IGU agreed to contract with Hilcorp to obtain the gas from the North Slope instead of from Cook Inlet. IGU also signed a contract with Harvest for the construction and operation of a 150,000 gallons-per-day LNG plant to be built on a gravel pad near pump station 1 of the trans-Alaska pipeline. IGU has obtained some new LNG trailers and has contracted with a trucking company to ship LNG by road from the North Slope LNG plant to Fairbanks.
Originally Harvest had anticipated completing the North Slope LNG facility by the end of last year. Clearly the project is taking longer to complete than had originally been envisaged.
Commissioning of the plant Beethe told the IGU board that construction of the LNG plant is now 99% complete, with the project now transitioning into its commissioning phase. The bulk of the work now in progress involves the commissioning of the plant, Beethe said. Most of the commissioning work currently being carried out involves the electrical and computer systems, he said. On the more physical side of the commissioning, the project team has been wrapping up the inspection of vessels designed to hold fluids that will be used by the plant. Harvest is also starting to fill the vessels with the fluids.
The first fuel gas into the facility is anticipated for the week of June 20, Beethe said.
With first tests of LNG production expected in July, performance testing of the plant is now anticipated in August, leading to that expected Sept. 1 date for formal contractual commencement of the plant operations.
The plant has four major structures: a gas treatment building; a liquefaction building; LNG storage and truck loading facilities; and an office and power generation building. The plant connects to the main Prudhoe Bay field fuel gas pipeline via two above ground pipelines. One of the pipelines will deliver gas to the facility while the other pipeline will return carbon dioxide to the fuel line. The carbon dioxide will be extracted from the gas in the gas treatment building -- Prudhoe Bay gas contains some carbon dioxide which must be removed before LNG can be manufactured.
Reducing air pollution A primary objective of IGU's expanding gas supply business is the reduction of air pollution that results from the use of fuel oil and wood burning stoves in the Fairbanks region. According to a report to the state legislature for the fourth quarter of 2024, a total of 238 miles of natural gas mainline had by then been installed in the Fairbanks and North Pole region as part of what is termed the Interior Energy Project, the gas supply expansion project that IGU is conducting. By the end of last year IGU served more than 2,950 residential and commercial customers, the report said.
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