New Port Mac facility possible

PALMER — A liquefied natural gas processing plant and electrical facility could bring Cook Inlet natural gas to the Alaskan interior, and jobs to the Valley, the Mat-Su Borough assembly heard this week.

The facility would transship and bunker up to 250,000 gallons of Cook Inlet natural gas per day. ISO containers — essentially giant thermoses designed to keep the gas cold and in its liquid, nonflammable state — would transit it via ship and out via rail, truck or pipeline.

In addition, the company could potentially send gas out “via wire,” by using it to fuel an electrical generation plant at the site and transmit the electricity out via the electric grid, according to a presentation to the Mat-Su Borough Assembly by WesPac Executive Vice President Brad Barnds.

The number of possible alternatives for transportation means consumers and utilities would be able to choose the most cost-effective means of transporting natural gas to a particular community.

The plant’s construction phase would create 350 temporary jobs with the potential for 30 additional permanent jobs, Barnds told the assembly.

Company officials anticipate having a more detailed proposal in the next 60 to 90 days. Any property agreement would then be reviewed by staff before heading to an assembly vote.

A lack of permitting requirements, as well as the presence of the Port Mackenzie Rail Spur project and the proximity to both the Interior and Cook Inlet make Port MacKenzie the ideal location, Barnds said.

Since 2010, the company has focused on natural gas in Alaska, Barnds said.

“We were originally looking to bring (LNG from British Columbia) up to the Rail Belt to serve what at the time had been considered a shortfall of gas in the near term,” he said. “We actually believed that was just going to be a bridge supply until the Cook Inlet gas supply had a resurgence. That has actually happened a little sooner than we anticipated, so we’re very interested today in working with Cook Inlet producers to liquefy gas and bring it to rural Alaskan markets.”

Five of the Cook Inlet producers have expressed interest in potentially using the facility, Barnds said.

The project is divided up into phases. In Phase 1, officials hope to transport Alaskan natural gas to Alaskans. A possible goal for Phase 2 could involve exporting natural gas to markets in Asia and Hawaii, though Barnds said that is a distant possibility.

The company believes the replacement of relatively high-priced diesel with Cook Inlet natural gas in Fairbanks and other interior communities will likely generate enough revenue to cover the $600 million cost of the infrastructure construction at Port MacKenzie, Barnds said. No public money – neither grants nor loans -- would be required for the construction, according to Barnds.

“If we didn’t believe that, we wouldn’t be doing it,” he said.

WesPac Midstream was founded in 1998 and has operated primarily as an infrastructure company since its inception. The construction of the facility also represents an opportunity for the company to branch out into ownership of natural gas itself, Barnds said.

Local operations won’t hamper other cargo operations at the port, Barnds said.

Officials expect that, in addition to creating jobs, the project could provide leasing revenue directly to the borough, as well as set fees for cargo off-loading and wharfing, said borough spokesperson Patty Sullivan.

In addition, the facility and availability of natural gas could draw other companies to the port, Barnds said.

“We believe this project is a benefit to the port, and to the community, and the state of Alaska,” he said. “We’ve been working very hard for the last two years to bring this proposal to your attention.”

Both borough manager John Moosey and mayor Larry DeVilbiss said the project is exciting.

“We are excited for these type of opportunities,” Moosey said. “One thing to add, they sought us out, we didn’t seek them out. They saw the value here.”

Contact Brian O’Connor at 352-2269 or brian.oconnor@frontiersman.com