IGU Board to Consider Proposal to Develop Second Source of Natural Gas in Mat-Su

Feb 7, 2018

The Interior Gas Utility board of directors agreed Tuesday to review a proposal to develop an another source of natural gas for its Fairbanks-area customers, in addition to its existing arrangement to bring Cook Inlet gas into the Interior.

Chairwoman Pam Throop says the IGU board agreed to study a proposal from a division of the German firm Siemens to supply natural gas with a natural gas production and liquefaction plant the company would build near the Mat-Su community of Houston.

The Interior Gas Utility bought the Pentex Alaska natural gas facility, adjacent to Port MacKenzie in December, to provide gas for Fairbanks-area customers.
Credit APRN file photo

“Siemens would do all the development, and bear all the cost,” she said. “And we would just buy gas from them.”

Throop says IGU received details of a plan from Siemens on Tuesday that provides additional details of an offer company officials made late last year, after the IGU had already committed to buying an existing liquefaction plant near Port MacKenzie as part of the $59.5 million purchase of Pentex Alaska Natural Gas Co. from the Alaska Industrial Development and Export Authority. She says it’s a compelling offer that the IGU board should at least consider, if all the details pencil out.

“It is way tempting, especially if the gas can come in for less (cost),” she said, “and if several other criteria that we think are important are met. I think it’s our obligation to look at it. That’s what I believe.”

Throop says if the board decides to move ahead on Siemens’ offer, it would use the older Pentex facility as a back-up source of natural gas. Board members Steve Haagenson and Frank Abegg both said in Tuesday’s board meeting that IGU should be looking for additional sources to ensure the supply of natural gas to the Interior won’t be interrupted.

“That’s what Steve’s very concerned about, and Frank Abegg, who are both engineers – that we have security of supply,” Throop said.

Also Tuesday, the IGU board heard a progress report on the progress of construction on the $45.5 million 5.25-million-gallon storage tank on the city’s south side.