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Flint Hills, GVEA still pursuing North Slope LNG project

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Posted: Thursday, November 15, 2012 12:11 am | Updated: 12:10 pm, Mon Jan 21, 2013.

FAIRBANKS — Flint Hills Resources, still working with GVEA, has put details of a proposed North Slope liquefied natural gas project on paper in an application with the State Pipeline Coordinator’s Office.

The company would finance the facility with “on-hand and available cash previously generated by cash flow from affiliate operations,” the application states.

The application, which stems from the 2011 agreement between Flint Hills and GVEA to work together, does not mention plans to provide fuel for space heating in Fairbanks, but it says there is potential to supply “other instate customers.”

It also does not mention a state grant to help build the plant, which has been a GVEA goal.

GVEA President Cory Borgeson said the utility is still seeking a state grant for the project and working with Flint Hills on the ownership of the North Slope facilities. GVEA is continuing to meet with state officials on options for government support, he said.

The project description says GVEA would use the gas to power its North Pole plant and Flint Hills would use gas at its refinery.

“The proposed project would produce gas for each company. Lower costs may result in lower rates for GVEA members. FHR would become more competitive by burning natural gas instead of crude oil derived fuel in its refinery,” the application states.

Two subsidiaries of Flint Hills are taking the lead on the project, Koch Alaska Pipeline LLC and Caribou North Slope LLC. The project is aimed at supplying 8 billion cubic feet a year to 9.5 billion cubic feet a year  of LNG to GVEA and Flint Hills.

Flint Hills filed the application Nov. 2 and may have acted because a similar application to build at the same place on the North Slope has been filed by Spectrum, a company headed by Ray Latchem.

Because one application falls within 30 days of the other, a state rule that the proposals are to be considered on a comparative basis by the Department of Natural Resources has been triggered.

Latchem has said his plan is to provide a cheaper fuel for North Slope industrial operations, with the option of expanding to supply GVEA and other users.

He said he believes there is room, “both physically and in the market,” for two North Slope plants.

Fairbanks Natural Gas has also filed an application saying it wants to build a small pipeline and plant on the North Slope for a trucking project.

Flint Hills said its project would begin operation in the second quarter of 2016, providing 29.5 million cubic feet a day. Construction would start in early 2014.

It is to include a 2,640-foot pipeline, 10 inches in diameter, that would run to the proposed LNG facility on the North Slope.

The gas would be trucked from the North Slope LNG facility to North Pole for use by Flint Hills and GVEA.

The LNG would be stored in a one-million-gallon tank on the North Slope, trucked to Fairbanks and unloaded into a two-million-gallon storage tank in North Pole, near the Flint Hills refinery on land purchased by GVEA.

The right-of-way application says the pipeline and LNG facility would cost $108 million for materials and $75 million construction and installation. That doesn’t include trucks or storage in North Pole.

•••

STUDENT ATHLETES: Most of the individual violations of NCAA rules for student athletes at UAF appear to be minor transgressions, but the overall pattern produced a problem that needed correcting.

The eligibility rules are strict and students who are performing well academically and taking a heavy course load can still end up in the wrong.

Of the 17 students with eligibility issues, all had passing grades and only one should have been ineligible for taking fewer than the 12-credit minimum. Everyone should have all known that was a no-no. The issues with the other students were not so obvious.

In one case, a student with an A average took courses in another subject and considered changing majors.

That student was not making satisfactory progress toward the declared major, however, and thus was not complying with the NCAA eligibility rules. In various other cases, there were students taking too many courses outside of their majors.

One student had a GPA of 3.68 and 15 credits, but one course was a developmental course, which doesn’t count toward a degree, and one course was a repeat of a course taken at another school. Another student had 16 credits and a 3.37 GPA, but only 10 credits counted toward the degree, which made that student ineligible under the NCAA rules.

These are not signs of serious academic problems. With the changes announced this week by Chancellor Brian Rogers, compliance with the NCAA rules going forward should not be difficult.

Dermot Cole can be reached at cole@newsminer.com or 459-7530.

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