Governor Sean Parnell yesterday submitted legislation designed to provide cheaper energy to Interior Alaskans. The bill gives the Alaska Industrial Development and Export Authority (AIDEA) the ability to provide up to $275 million in financing for a natural gas liquefaction plant and financing for a liquefied natural gas (LNG) distribution system within the Fairbanks North Star Borough.

A North Slope LNG plant has the potential to deliver gas via truck to Fairbanks and beyond. It can provide access to gas for Alaska’s road and river communities, including Southcentral Alaska.

“It’s time to put Alaska’s gas to work for Interior Alaskans,” Governor Parnell said. “Natural gas is a crucial component of Alaskans’ energy future. We must put in place the financing for natural gas liquefaction and distribution. Building an Interior gas distribution system will benefit Alaskans now, and position those communities to take gas from an Alaska gasline.”

The bill authorizes AIDEA to provide financing for natural gas facilities through the Sustainable Energy Transmission and Supply (SETS) Fund. The bill permits AIDEA to issue up to $150 million in bonds for the project. It also authorizes AIDEA to provide another $125 million in direct financing from the SETS Fund. This financing could be in the form of low-interest loans or guarantees, or any other financing mechanism permitted under the SETS program.

Last month, Governor Parnell proposed a $355 million financial package to jump-start construction of a natural gas liquefaction plant on Alaska’s North Slope and a Fairbanks-area natural gas distribution system. The package included low interest loans authorized by this legislation, gas storage tax credits, state general funds, and private investment.

A copy of the bill and transmittal letters is available at:
https://gov.alaska.gov/parnell_media/resources_files/naturalgas_011613.pdf