Interior Energy Project reports status

Alan Bailey

Petroleum News

The Interior Energy Project, an Alaska Industrial Development and Export Authority sponsored project to bring increased supplies of affordable natural gas to Fairbanks and its surrounds, has issued its latest quarterly report to the state Legislature. The project continues to make progress but has been slowed somewhat as a consequence of the COVID pandemic.

Gas for Fairbanks is liquified at the Titan LNG plant near Point Mackenzie on Cook Inlet and transported as LNG to Fairbanks using newly acquired road trailers. A new 5.25 million-gallon LNG storage tank was completed in Fairbanks at the end of 2019. This tank is providing LNG capacity to increase the number of gas consumers in Fairbanks.

Meanwhile, Interior Alaska Natural Gas Utility, or IGU, a Fairbanks-based gas utility, had completed the purchase of Fairbanks Natural Gas, to form a single, consolidated gas utility in the Fairbanks region.

A front end engineering and design project for a planned expansion of the Titan plant was completed in the first quarter of this year. However, with the impact of the pandemic on the price of fuel oil in Fairbanks leading to increased uncertainty over how much demand there might be for the use of natural gas to heat buildings, in April IGU decided to defer a final investment decision for the Titan expansion.

IGU has moved ahead with the installation of LNG storage facilities in North Pole, to open up new gas supplies there. Completion of this project will be delayed from September to Nov. 30 because of impacts from the pandemic, the quarterly report says.

Some expansions were made to the gas distribution networks in Fairbanks and North Pole in 2015, but no further expansions have been made since then. However, given the additional gas supply capabilities from the new LNG storage facilities, IGU has installed more than 200 new service lines to buildings and has allowed new customers to begin using natural gas, the report says.

Meanwhile, the Regulatory Commission of Alaska has approved the merger of IGU’s and FNG’s certificates of public necessity and convenience, thus confirming the consolidation of the utilities.

- ALAN BAILEY