A pair of short pipeline connections designed to support the highway delivery of liquefied natural gas (LNG) from liquefaction projects at Prudhoe Bay, AK, have received preliminary approval from Alaska’s State Pipeline Coordinator’s Office, moving the state one step closer to providing LNG to Fairbanks.

In separate proposed decisions, Acting State Pipeline Coordinator Allison Iversen proposed to grant rights of way for North Slope pipelines to Polar LNG and Spectrum Alaska, concluding that both companies are “fit, willing and able to construct and operate a pipeline in a manner required by present and future public interest…”

The projects are relatively small — the Polar Natural Gas Pipeline right-of-way lease is 3.5 miles long and Spectrum’s proposed natural gas pipeline would be just 1,100-feet long — but they could be key to Alaska’s Interior gas trucking project, which would bring LNG to the region’s largest city. Alaska’s Department of Natural Resources is accepting public comments on the Spectrum application through Sept. 3 and the Polar project through Sept. 16.

Spectrum’s proposed pipeline and a related LNG facility are located entirely within the restricted Prudhoe Bay Unit operating area. The purpose of the pipeline is to transport natural gas from the Prudhoe Bay Unit Central Gas Facility to the LNG facility for processing. “The LNG produced by the facility will be transported by truck to either the North Slope or utilities along the highway system,” according to Spectrum’s application.

The Polar pipeline would originate at a tie-in to the Seawater Injection Plant feed gas line and terminate at the Fairbanks Natural Gas pad, at Prudhoe Bay (Deadhorse).

Comparatively inexpensive Alaska natural gas could be on its way to the state’s interior by the end of 2015 under the governor’s Interior Energy Plan, according to a recent report by two state agencies (see Daily GPI, July 30). Natural gas could relieve residents from high fuel oil prices for space heating. The Alaska Interior Development and Export Authority (AIDEA) determined that a 9 Bcf/year LNG plant on the North Slope is technically and economically feasible for serving the initial Fairbanks North Star Borough (FNSB) heating demand.

AIDEA intends to build, with private-sector partners, an expandable 9 Bcf LNG plant on the North Slope to serve the initial FNSB space heating demand. The total capital cost of the plant is estimated to be $207.7 million, which includes $8.4 million for natural gas pretreatment and $199.3 million for the liquefaction aspects of the plant. The state of Alaska has proposed supporting the project with $57.5 million in cash and $125 million in low-interest loans. Last December, Gov. Sean Parnell proposed a package intended to speed construction of a natural gas liquefaction plant on the North Slope and a gas distribution system in the Fairbanks area (see Daily GPI, Dec. 11, 2012). Southcentral Alaska utilities are facing gas supply shortfalls starting in the winter of 2014-2015 (seeDaily GPI, Nov. 21, 2012).