Gov. Sean Parnell took a major step toward making a proposed North Slope natural gas liquefaction plant a reality Friday, announcing a $355 million package to support its construction as well as an utility and a private-sector natural gas distribution system in the Fairbanks area.
According to Parnell’s office, the core of the plan involves proposed legislation which would permit up to $275 million in Alaska Industrial Development and Export Authority bonding authorization and loans. Parnell also wants to commit $50 million in general fund dollars to the projects, as well as $30 million in existing gas storage tax credits.
If the plan is fully implemented, the North Slope plant’s liquefied natural gas would be delivered to Fairbanks by truck along the Dalton Highway, offering a supply to communities linked by both roads and rivers. Deliveries are projected to begin in late 2015.
Parnell says the package could reduce Alaskans’ heating and electric bills, as well as paving the way to lower energy costs for much of the state.
“While we continue to aggressively pursue a gas pipeline to get Alaska’s gas to Alaskans, that project is, at minimum, some years away. In the meantime, trucking gas from the North Slope is the best alternative - with the added benefit of preparing communities for an eventual connection to a pipeline.”
Elements of the package have been previously discussed in Alaska politics, with former gubernatorial candidate and Alaska Gasline Port Authority head Bill Walker saying last year that providing North Slope natural gas to Fairbanks could dramatically cut the city’s gas costs. Sen. Lisa Murkowski also suggested last year that the state consider investing in a pipeline to Fairbanks, a model proponents say would spur private development of an additional pipeline from there to Southcentral Alaska.
Parnell’s office says both AIDEA and the Alaska Energy Authority are now looking for interested parties to “participate in the financing, development and operation of a liquefied natural gas production facility” on the North Slope.
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