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Therriault: Parnell considering state ownership of natural gas plant on North Slope

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Posted: Monday, November 26, 2012 11:52 pm | Updated: 12:07 pm, Mon Jan 21, 2013.

FAIRBANKS — Gov. Sean Parnell is considering state ownership of a gas liquefaction plant on the North Slope, a state official said Monday in Fairbanks.

The governor is studying an “open access” liquefaction plant that could process natural gas from multiple oil companies and sell it to a wide group of buyers, said Gene Therriault, deputy director of the Alaska Energy Authority.

A liquefaction plant is the first and most expensive piece of infrastructure needed to truck North Slope natural gas to Fairbanks.

A state-owned liquefaction plant makes sense because customers from Tok to rural villages potentially would use natural gas and propane from the plant, Therriault said.

Therriault said it would be inappropriate for the state to finance a plant owned solely by a private company such as Fairbanks Natural Gas or the local electric cooperative, Golden Valley Electric Association, he said.

“I think the governor believes Fairbanks and the demand in Fairbanks is the initial demand that gets the project rolling. But he (the governor) views this as an asset, especially if the state is going to participate, that would serve a much larger geographic area than Fairbanks,” Therriault said.

He spoke during a meeting of the Lowell Group, a group of Interior Alaska residents who meet every week to discuss community issues in the basement conference room of Fairbanks Neighborhood Housing.

For years, the debate about natural gas trucking plans in Fairbanks has been dominated by competing proposals from the big three potential buyers of North Slope natural gas: GVEA, Fairbanks Natural Gas and the Flint Hills Refinery in North Pole. Flint Hills recently announced it was no longer pursuing a North Slope gas plan.

The potentially larger role for the state in the project comes as the governor is preparing his annual budget, due for release Dec. 15. Several local governments and organizations are requesting a state subsidy on the liquefaction plant to accelerate the project. Several members of the Interior’s legislative delegation also attended Monday’s meeting.

Local leaders consider natural gas a priority for the Interior because it could offset high heating and electricity costs generated by high oil prices.

Contact staff writer Sam Friedman at 459-7545.

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