IGU says North Slope LNG commissioning underway; $18 million estimate to link Fairbanks and North Pole systems

An Interior Alaska Natural Gas Utility (IGU) representative reported to the Fairbanks North Star Borough Assembly committee of the whole on Aug. 21 that the utility expects a North Slope liquefaction facility to enter production during commissioning and that IGU is increasing local distribution capacity while seeking grants and legislative support.

The IGU representative said the utility has processed about 140 new service-line applications as of the morning of the meeting and expects to install at least 246 new service lines by the end of the summer. "We will install at least 246 new service lines," the speaker said, and added that IGU will add about 9.5 miles of mainline this construction season, with most extensions in North Pole funded by a 2024 targeted airshed grant. The presenter said IGU has used most of the $4,000,000 awarded under that grant and is using a separate 2024 state capital allocation for short extensions to customers who are ready to convert immediately.

On LNG operations, the presenter described the North Slope plant layout — power generation, pretreatment, liquefaction (Nitrogen) building and two 150,000-gallon storage tanks — and said some LNG from IGU's Titan facility arrived at the North Slope for pre-chill of the tanks. "That LNG got there today," the speaker said, describing the pre-chill procedure recommended by the tank manufacturer. He said the plant's produced LNG is "about 99% methane" after pretreatment and noted that impurities (about 12% in North Slope gas, per his account) must be stripped to avoid operational problems at cryogenic temperatures.

On timing, the IGU representative cautioned that the facility was in commissioning but said, "should everything go according to plan, the facility will start producing LNG before September 1." He described a plan to load IGU-owned trailers at the storage tanks and transport the product to Fairbanks for local delivery.

Assembly members pressed staff on logistics and costs. When asked how much it would cost to connect IGU's Fairbanks and North Pole systems, the presenter said an all-in build cost would be about $18,000,000 to construct roughly 13–14 miles of mainline (mostly 12-inch, stepping down to 8-inch in parts). He said IGU recently applied for grant funding, did not receive the larger construction grant, but did secure a smaller award to fund design, survey and permitting for the route.

Mayor Hopkins and other members questioned operational impacts on Dalton Highway maintenance and trucking frequency. The IGU representative outlined pickup schedules based on plant turndown limits (plant capacity up to 150,000 gallons per day; can turn down to half), saying early operations will likely require multiple trailer pickups during the year and that IGU plans shutdowns strategically when production is off. On whether IGU or contractors must pay road tolls or dedicated maintenance fees, the presenter said he was not aware of any such tolls and said some details may be handled at the borough level.

On policy and funding, the presenter said IGU will continue to press the legislature for Dalton Highway maintenance funding and is exploring grants and conversion-incentive programs (referenced in the presentation packet) to help lower- and moderate-income homeowners afford conversion costs. He noted that conversion cost tracking is maintained by the borough air quality department rather than IGU.

The report closed after questions and the assembly thanked IGU for the update. The assembly did not take a formal vote on IGU recommendations during the committee meeting.