FAIRBANKS, Alaska (AP) — The effort to truck North Slope natural gas to the Fairbanks area for home heating and electricity generation is closer to fruition.
The Alaska Industrial Development and Export Authority announced Friday it signed an agreement with project-development firm MWH that outlines the construction, ownership and operation of the liquefied natural gas plant that's central to the Interior Energy Project.
The state agency will own the plant, while an MWH subsidiary will build and operate it, The Fairbanks Daily News-Miner reported (http://is.gd/C3IPDf).
The subsidiary, Northern Lights Energy, will also sell the liquefied natural gas produced by the plant to Interior buyers.
The agreement allows Northern Lights to start hashing out contracts with Fairbanks-area utilities that will detail the volume of gas and how much it will cost. Fairbanks Natural Gas, the municipal Interior Gas Utility and Golden Valley Electric Association have expressed interest in buying the gas.
The natural gas is expected to substantially cut home-heating costs in Fairbanks and help improve the area's air quality. Fairbanks regularly violates federal air quality standards for particulates. Wood stoves used by people trying to cut down on their fuel oil bills contribute to the problem.
A bill signed last year by Gov. Sean Parnell launched the Interior Energy Project. The measure called for a private-public partnership to deliver liquefied natural gas to the Interior through grants, low-interest loans and bonds. The project also includes money for re-gasification, storage and distribution in Fairbanks.
The Fairbanks area is expected to start receiving the gas by late next year.