FERC grants Mat-Su Borough’s request on Port Mac

The Alaska LNG Project appears to have just blown off Mat-Su as a pipeline terminal and site for its big liquefied natural gas plant. In its analysis the LNG planners mistakenly looked at the wrong site – Point MacKenzie instead of Port MacKenzie.

The U.S. Federal Energy Regulatory Commission, or FERC, has told Alaska LNG, now led by the state of Alaska, to take another look at Mat-Su, and as of last week the Matanuska-Susitna Borough gets to be at the table when that is done.

The mixup occurred when Alaska LNG was led by North Slope producing companies in a consortium in which the state-owned Alaska Gasline Development Corp. or AGDC, was a one-fourth partner. Alaska LNG is now led by the state, with AGDC as 100 percent owner.

FERC announced Feb. 27 that it has granted the borough’s request to become an intervenor in the commission’s regulatory proceedings on Alaska LNG’s application for its certificate, or federal operating permit.

The borough would always be permitted to comment in the regulatory proceedings but having intervenor status gives its comments greater weight.

“We are pleased with FERC’s decision to include us. We believe Alaska LNG can change the economics of Alaska, and given a fair review, Port MacKenzie has the potential to be a huge asset to the project,” Mat-Su Borough manager John Moosey said In a statement.

The borough filed its intervenor request Jan. 9 after reports were submitted to FERC last fall that spelled out the reasons for Alaska LNG’s rejecting Mat-Su. When the borough realized the mix up between Point MacKenzie and Port MacKenzie – the two are several miles apart – it asked Alaska LNG to redo the analysis. Alaska LNG, by then led by the state, refused.

At that point the intervention was filed, which led to FERC’s formal request to Alaska LNG on Feb. 16 to redo the Mat-Su analysis.

Since FERC’s order Alaska LNG officials visited the borough to begin discussions on how the new analysis will be done, borough manager Moosey said.

“They are still developing a work plan and wanted to meet with FERC in Washington, D.C. to get clarification what is being asked by the commission, Moosey said in an interview.

Whether additional field work will be required for the Port MacKenzie analysis would be determined after that meeting, he said.

Aside from the mixup over the two points of land, the lead manager on the industry-led Alaska LNG group, Steve Butt, an ExxonMobil manager, said at the time the Kenai Peninsula was chosen as the favored site that the availability of land around the proposed plant site at Nikiski was a key factor.

Alaska LNG has since gone on to purchase the land it needs from private property owners.

Moosey said open and available industrial land is no problem around the Port MacKenzie, where the borough owns over 9,000 acres of land classed for industrial use.

Recently Alaska LNG officials have mentioned the Mat-Su port’s proximity to the Port of Anchorage – the two are across Knik Arm from each other – and possible conflict with shipping congestion.

Moosey said he is unaware of any shipping studies that would come to that conclusion, however. When the new analysis is done that will be looked at.

One of the biggest things going in Mat-Su’s favor, however, is that the state’s gas corporation, AGDC, has a parallel all-Alaska gas pipeline plan, called the Alaska Stand-Alone Pipeline, or ASAP, that is very advanced in its regulatory approvals and has a route that would bring the pipeline near populated communities in Mat-Su and within 13 miles of Port MacKenzie compared with the current Alaska LNG pipeline route, which is near the Susitna River miles to the west.

Moosey pointed out that the advanced status of the regulatory proceeding with ASAP should allow the state to change the routes fairly easily.

Under direction by the Legislature AGDC developed the ASAP project as a backup to get gas to Alaska communities in case the much-larger Alaska LNG Project falters.

In actuality, AGDC has been working on the two separate projects in tandem because the right-of-way for ASAP across state lands, about half the 400-mile route, has already been granted and would be made available to Alaska LNG if the larger project proceeds.

ASAP is a 36-inch pipeline compared with Alaska LNG’s 42-inch pipe, and is near to completion of its Supplemental Environmental Impact Statement by the U.S. Army Corps of Engineers.

The routes and rights-of-way for the two projects are exactly the same along most of the pipeline’s 800-mile length, except that, in Southcentral Alaska, the Alaska LNG route veers to the west toward the Susitna River and the point at which it would cross Cook Inlet whereas the ASAP route comes to a terminus near the Mat-Su Borough’s populated communities.