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LNG by Rail Now an Option For Interior Alaska

Developers of competing projects to serve Interior Alaska natural gas demand with liquefied natural gas (LNG) now have the option of shipping by rail as the Alaska Railroad Corp. has been cleared by federal regulators to carry containerized LNG.

Alaska Railroad last November applied for authorization to transport LNG and earlier this month received limited authorization from the Federal Railroad Administration (FRA) to do so (see Daily GPI,March 26). A three-page letter from the FRA enumerates 11 stipulations in the two-year authorization, including provision of first-responder training, track and equipment inspections, as well as regular reporting to FRA.

The Alaska Industrial Development and Export Authority (AIDEA) is overseeing the Interior Energy Project (IEP) to serve Interior residents with natural gas. Last month AIDEA selected five finalists among the respondents to a request for proposals (RFP). The finalists areHarvest Alaska LLC (Hilcorp Alaska LLC),Phoenix Clean Fuels LLC,Salix Inc. (Avista Corp.), Spectrum LNG LLC, and WesPac Midstream LLC.

"The primary transportation focus of the IEP as of Oct. 1, 2015 is LNG trucking," AIDEA told Alaska lawmakers in a recent report. "RFP respondents offered a combination of trucking and rail options as part of their proposals. If gas is sourced from the North Slope, trucking remains the only option. If gas is sourced from Cook Inlet, trucking is the primary option, with rail transport still under consideration."

According to the report, two alternatives proposed by Harvest do not include transport, leaving the decision up to Interior utilities to either truck or rail from Cook Inlet. One alternative provides for LNG transportation from Cook Inlet to Interior Alaska but does not identify transportation mode.

The Phoenix proposal includes trucking LNG from the North Slope to the Interior. The Salix proposal does not include transport but can accommodate either rail or truck transport from Cook Inlet.

Spectrum provided two alternatives to source gas, North Slope and Cook Inlet, but did not provide for transportation, leaving it to the utilities. Trucking is possible from both locations and rail is possible from Cook Inlet.

The WesPac proposal includes two alternatives for LNG either produced or imported into Southcentral Alaska, both of which would include either truck or rail transport if available. A third alternative leaves transport up to the utilities.

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