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Developer tells business group about North Slope LNG option

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Posted: Monday, December 3, 2012 11:44 pm

FAIRBANKS — Ray Latchem, the developer who started Fairbanks Natural Gas in 1997, spoke to the board of the Fairbanks Chamber of Commerce Monday about his proposal for a natural gas treatment plant on the North Slope.

This is one of the competing ideas under discussion in Fairbanks, along with a state-owned plant or one that the Golden Valley Electric Association might seek state funds to build.

Latchem said fuel from this system could be trucked to Fairbanks and transported on the Alaska Railroad to Anchorage. The wide gap between natural gas prices and diesel fuel prices is creating a powerful economic incentive to switch fuels.

He said his company, Spectrum LNG, could be producing gas on the North Slope by 2014.

The gas could be trucked to Fairbanks for use by Golden Valley Electric Association and other buyers and it could be used as fuel for Alaska Railroad locomotives and taken to Anchorage to satisfy a portion of the peak demand of the natural gas and electric utilities in the state’s largest city.

In the past year in Alaska natural gas has sold for as low as $2 for a million Btu, while diesel fuel on the North Slope has sold for more than $5 per gallon, the equivalent of more than

$40 per million Btu.

Latchem said if a plant is devised that benefits Anchorage as well as Fairbanks, it stands a much better chance of getting legislative support. He is not in favor of having the state subsidize a plant on the North Slope, preferring that any state money go into building a distribution system, similar to the way rural electric utilities were expanded in the U.S.

The counter argument is that if the state builds a processing plant, the end prices for the fuel could be lower, cutting out one of the middlemen. Latchem said he thinks he could do it faster than a state-backed plant, more efficiently and at a lower price.

Spectrum is seeking state approval for a pipeline of 1,100 feet that would cost less than $1 million. Flint Hills had filed for a LNG plant on the same site, but later announced it was pulling out of its partnership with GVEA.

Latchem built the Deadhorse natural gas system and established Fairbanks Natural Gas and its Point McKenzie liquefaction facility, which he later sold.


LIGHT THE TREE: The Children’s Christmas Tree will be lit at 4:30 p.m. Thursday outside City Hall.

The Sweet Adelines plan to sing Christmas carols and the staff of Santa’s Vagabond Travel will hand out candy canes.

Carol Brice and Blanche Brunk, early leaders of the Resource Center for Parents and Children, helped start the tradition in 1979 and it continued for several years. It was revived a year ago in downtown Fairbanks.

Monte Jordan, a longtime volunteer with the RCPC and a member of the Carol H. Brice Family Center, said a 10-foot artificial tree will be illuminated for the occasion.

In future years, Jordan said, they’d like to see a real tree become the Fairbanks Children’s Christmas Tree.

“The purpose of this simple celebration is to remember all the children in our community,” she said. “Everyone is invited, especially kids.”

Local groups have donated ornaments, to be supplemented by snowflakes made by students at Denali Elementary School taught by Maxine Dibert, Pat Telep and Becky Zaverl.


NEW BOOK: Former University of Alaska President Jerry Komisar has published his first novel, “The Last Believer,” available locally at If Only ... A Fine Store at 215 Cushman St.

Komisar, who was UA president for eight years, left Fairbanks in 1998 and now lives in Washington, D.C. He has worked as a consultant and on several manuscripts in recent years, said Rebecca Morse, owner of If Only and a friend of the Komisars.

She has autographed copies of the book for $12.95. It also is available on

The store is open 10 a.m. to 6 p.m. Monday through Saturday and 11 a.m. to

5 p.m. Sunday.

He describes the novel as a “romantic adventure and philosophical journey set on the streets of Washington D.C. and London and amid the hills of Ukraine.”

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