AIDEA approves funding for Fairbanks LNG storage

The board of the Alaska Industrial Development and Export Authority has approved the use of up to $45.5 million in Sustainable Energy Transmission and Supply, or SETS, loans for the construction of a new 5.25 million gallon liquefied natural gas storage facility in Fairbanks. The facility is needed in anticipation of an expanded LNG supply for Fairbanks, an outcome of AIDEA’s Interior Energy Project.

The IEP is anxious to move ahead with the storage tank construction, to ensure that the tank can go into operation by Jan. 1, 2020, to qualify for a state tax credit of up to $15 million. The financing plan for the IEP assumes award of the tax credit.

Prior to a vote on the SETS funding approval during the AIDEA board’s Dec. 7 meeting, Dan Britton, CEO of FNG, told the board that the planned storage facility will perform a crucial role for both the community and for the IEP. The idea is to be able to hold 30 to 40 days of LNG supply to manage gas availability, ensure security of supply and handle peak demand. The ability to store summer produced gas for winter use will enable substantially increased LNG production from the Titan LNG plant near Point Mackenzie, thus upping the gas supply to Fairbanks, Britton said.

The plan for the development envisages the award in mid-December of a contract for tank construction, with foundation construction to start at the beginning of March. The plan envisages the new tank being ready for commissioning at the end of June 2019.

FNG issued a request for proposals for the construction project and has identified a likely contractor for the work, Britton said.

- ALAN BAILEY