IGU Board Awards Contract to Fairbanks Trucking Firm to Haul LNG From Mat-Su Plant

May 29, 2019

The board of directors for the utility that distributes natural gas in the Fairbanks area will consider awarding a three-year contract next week to a locally based trucking company to haul liquefied natural gas, or LNG, from a plant near Wasilla to Fairbanks, mainly over the Parks Highway.

Interior Gas Utility general manager Dan Britton says he selected Big State Logistics’ bid over three other firms vying for the contract mainly because the company offered to deliver the LNG for a lower price.

The trucking contract would require Fairbanks-based Big State Logistics to haul more than a thousand tankers like this annually beginning next year. The number of tankers will increase over the coming years.
Credit Fairbanks Natural Gas

“Based on Big State Logistics’ response and the pricing provided, and the fact they’ve also provided the service for us for the last three years, they were the selected contractor,” he said.

Britton says the contract requires Big State to provide drivers and trucks, and the utility will supply tankers. And he says the company also will be required to use the utility’s LNG-fueled trucks for some of those deliveries.

“So they lease those trucks from us and provide a reduced cost, as we provide the fuel for those trucks,” he said.

Britton says the contract calls for delivery of more than a thousand tanker-truckloads of LNG in the first year of the contract from the utility’s gas-liquification plant at Point MacKenzie. He says the number of deliveries is expected to increase in the coming years, as the IGU builds-out its gas-pipeline network around Fairbanks and North Pole.

“The contract’s expected to start out at somewhere between a thousand and 12-hundred loads (annually),” he said. “And we’ll begin to increase each year thereafter, as we grow demand.”

Britton says the board decided in April to get its LNG from the Titan plant after considering another offer from a subsidiary of Siemens Corporation. The utility solicited bids for the contract beginning April 30 and announced its selection of Big State Logistics last week. He says the utility has begun design work on an expansion of the Titan plant to meet the increased demand that utility officials hope will come in the next few years.

“The expansion will allow us to add additional customers as we move forward,” he said.

Britton says if the board approves the contract award, the gas initially will be stored at two existing facilities in Fairbanks that can hold up to 344,000 gallons of LNG. He says when the much-bigger, 5.25 million-gallon storage tank that the utility’s building on the city’s south side is completed, the gas will be stored there.