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BP Gas Could Power, Heat Interior Alaska

Fairbanks, AK-based electric cooperative Golden Valley Electric Association (GVEA) has signed a natural gas supply contract with BP Exploration (Alaska) Inc. for up to 23 Bcf of gas per year for 20 years. The deal would meet its power generation needs and eventually allow for gas deliveries -- via liquefied natural gas (LNG) -- to Interior Alaska, the cooperative said.

The gas supply would allow GVEA to convert its North Pole Expansion Power Plant from oil to natural gas fuel.

GVEA spokesperson Cassandra Cerny told NGI the not-for-profit cooperative is in the engineering stages of a liquefaction project that would provide LNG to be trucked to GVEA's power plant in the Interior where it would be regasified to be burned for power generation. Other parties would distribute the extra gas to consumers in the Interior.

"It is part of our mission to see that the community gets energy at a reasonable cost," Cerny said.

The liquefaction and transport solution would not eliminate the need for an in-state gas pipeline from the North Slope; however GVEA views it as a "bridge" for the meantime, Cerny said. "If a gas pipeline came in the future, that would be great, but this is more like it could happen in the short term," she said.

The deal with BP provides enough gas to supply Interior gas consumers, Cerny said.

"The high cost of space heating is crushing Interior Alaska," the coop said. GVEA would be able to supply natural gas to the region, opening up opportunities for distribution system expansion, it said.

"Beyond satisfying our own electrical generation needs, we recognized an opportunity to address the energy crisis facing Interior Alaska's residents and businesses," said GVEA Interim CEO Cory Borgeson. "BP's willingness to work with our cooperative to address Interior Alaska's energy crisis is appreciated and is crucial to the long-term success of our communities."

Natural gas deliveries to the Interior could begin by 2015, GVEA said.

GVEA operates 3,151 miles of electric transmission and distribution lines and 35 substations. Its system is interconnected with Fort Wainwright, Eielson Air Force Base, Fort Greely, the University of Alaska-Fairbanks and all electric utilities in the Alaska Railbelt, which extends from Homer, AK, to Fairbanks. Peak load in 2011 was 211.5 MW. System peak of 223 MW was set in December 2007.

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