Two Interior Energy Project proposals under consideration

The Interior Energy Project remains focused on getting natural gas to the region at long targeted price point.

IEP team leader Bob Shefchik says proposals being considered from 2 vying project partners would provide gas to customers at a price equivalent to 2 dollar heating oil.

“The North Slope project from Spectrum and the Cook Inlet project from Salix have shown the ability to target that price,” Shefchik said.

The Alaska Industrial Development and Export Authority overseeing the Interior Energy Project is weighing the competing gas supply proposals.

Shefchik says a planned December decision has been postponed until after the New Year.

“We’ll make a recommendation to the AIDEA board mid-January,” Shefchik said. “The AIDEA board will act early February.”

Whatever company is selected, gas would be trucked to Fairbanks and locally distributed by the North Star Borough operated Interior Gas Utility, which is merging with recently state purchased Fairbanks Natural Gas.

The combined entities have service areas that encompass the city of Fairbanks and the broader area, including North Pole.

State funding has helped begin build out of neighborhood distribution piping in preparation for the new gas supply.

Shefchik says remaining state grants and loans should be enough to fund construction of a gas processing plant and transportation infrastructure to get it to Fairbanks.

“Whether or not there’ll be sufficient resources for the complete six phases of the build-out around the community will depend on when one can get and use the bond money,” Shefchik said.

The state has approved $150 million in bonding authority for the project.

Shefchik emphasizes that bonding agencies will need to see that area residents want to convert to gas.

“The expectation is the initial build-out will get the demand and the customer’s connecting,” Shefchik said. “And you can use that to profile the growth curve.”

Over a thousand Fairbanks customers are currently served with a limited supply of gas trucked in from Cook Inlet by Fairbanks Natural Gas.

Shefchik says newly laid distribution piping adds the potential for over 5,000 more customers, when new gas becomes available through the IEP in late 2017 or early 2018.

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Dan Bross is a reporter at KUAC in Fairbanks.