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AIDEA delays North Slope LNG plant award by 1 month

Posted: December 19, 2013 - 1:12am

FAIRBANKS — A decision on who will build and operate a North Slope natural gas plant that will be used to fill trucks for shipment to the Fairbanks area has been delayed.

The Alaska Industrial Development and Export Authority was expected to pick one of three proposals at a meeting Wednesday, but now will make that decision Jan. 14, the Fairbanks Daily News-Miner reported.

The delay was granted to give Golden Valley Electric Association more time to determine how much gas it might buy. The association, which is considering using natural gas to replace costlier fuels used in power plants, is expected to be the plant’s largest buyer.

Golden Valley was only asked in November how much gas it might purchase.

“Depending upon an agreed-upon fixed price that is commercially reasonable, GVEA envisions being able to commit to purchasing between 1.5 and 2.5 (billion cubic feet) of gas annually,” GVEA CEO Cory Borgeson wrote in a letter the day after receiving the request.

Borgeson told the newspaper the figure was produced in a day and said a more accurate figure will take more time.

How much Golden Valley intends to purchase could play a critical role in which of the three proposals will be chosen to build and operate the plant.

Those proposals are from Spectrum LNG, MWH Global and Fairbanks Natural Gas’ parent company.

“AIDEA recognizes the need for negotiated contracts for the plant capacity and they have asked Golden Valley to look at the three proposals to determine if Golden Valley can become a purchaser of LNG,” Borgeson said. “In order to do additional due diligence it would require additional time.”

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