Interior Alaska Natural Gas Utility reports expansion, North Slope supply timeline

Interior Alaska Natural Gas Utility (IGU) representatives told the Fairbanks North Star Borough Assembly Committee of the Whole on Jan. 16 that the utility installed more than 16 miles of mainline and 475 new service lines in the most recent construction season and is preparing for a switch to North Slope liquefied natural gas (LNG) supply.

The update, delivered by IGU board chair Steve Hagginson and an IGU representative, outlined grant funding that officials say enabled the expansion and described a February–March commissioning window for North Slope supply with facility start-up possibly in April.

IGU said the expansion is intended to give residents in high‑pollution areas the option to switch from dirtier heating fuels to natural gas, a change the utility and borough officials discussed as part of local air‑quality compliance efforts. “We have received $4,000,000 from the targeted air shed grant,” Hagginson said. He added IGU received a $2,500,000 state capital appropriation and a nearly $90,000 grant from the Pipeline and Hazardous Materials Safety Administration to improve emergency preparedness.

IGU reported installing about 16 miles of mainline and 475 service lines in the last construction season and said roughly 65–70% of those new service lines are already connected to customers’ natural gas service. The utility said it has 65 new service agreements for the 2025 construction season; IGU described an average installed service‑line cost of about $5,000 and said the utility “significantly subsidizes” that cost. As stated in the update, customers currently pay a substantially reduced amount at installation and are contractually expected to use the service within six months or be responsible for the installation cost.

Hagginson described map details for the recent build‑out, saying much of the work last year was in North Pole, including roughly 10 miles of mainline north of Hearst Road and targeted work where air‑quality monitors show poor performance. Planned lines were shown in green on IGU maps, and red dots represented processed natural‑gas applications the utility had received. “We have spent about $2,500,000 from that $4,000,000 targeted airship grant this last year, and we intend to put the rest of it in the ground this summer,” Hagginson said.

On supply, IGU said contracting and transport arrangements are in place for North Slope LNG. “The latest update that we have received is that commissioning, which is a process that takes about 45 days, is going to start in February, early March, with then facility start up sometimes in April,” Hagginson said. He added IGU plans to keep the Cook Inlet liquefaction facility (Titan) in warm storage as a backup until North Slope transport proves reliable.

IGU staff discussed a pending congressional appropriation request. The borough and IGU jointly sought $20,000,000; Hagginson said Senator Lisa Murkowski added $3,000,000 to an appropriations bill and that Congress typically completes funding decisions on a March timeline. The utility also said it has applied for Defense Communities Infrastructure Program funding to support interconnection work and that one estimate to connect the Fairbanks and North Pole systems is about $16,000,000; IGU said it is seeking grant funding for that work.

Assemblymembers asked technical and operational questions during the update. Assemblymember Guttenberg congratulated IGU on its audit and asked about expansion into Chena/Chino Ridge; IGU said expansion decisions combine consumer interest and available grant funding. Assemblymember Haney asked about differences between Cook Inlet and North Slope gas compositions and about hydrogen sulfide (H2S) and impurities; Hagginson said liquefaction removes impurities and that the utility performs gas analyses at least twice a year through a third‑party contractor.

IGU said it will continue mainline expansion as grant funding and capital allow and reiterated that rate revenue is its only ongoing operating revenue source, so officials seek outside funding to avoid imposing expansion costs on existing customers. The utility also described work to hire seasonal staff, build local maintenance capacity for trailers, and maintain emergency preparedness equipment purchased with the PHMSA grant.

Members of the assembly and IGU discussed routing options for any lateral or interconnection, including routing along Badger Road to avoid construction inside Fort Wainwright when required by certain federal grants.

IGU concluded the presentation by inviting questions and noting that the utility will submit reimbursement requests to the state for prior capital spending. The assembly did not take formal action on the presentation.