State eyes Pt. Mac LNG facility

ANCHORAGE — The state’s plans to purchase Pentex Alaska Natural Gas Company include the Titan Alaska LNG plant at Point MacKenzie.

A presentation made to the Alaska Industrial Development and Export Authority in 2013 listed numerous assets owned by the company — including the Fairbanks Natural Gas utility and a liquid natural gas fueling station in Big Lake.

The nonbinding letter of intent signed Wednesday by AIDEA and Pentex puts the total price of the sale at $52.5 million, according to AIDEA spokesman Karsten Rodvik.

The Alaska Interior Energy project, which intends to moderate energy costs and increase air quality in Interior Alaska, ended a relationship with prior partner and engineering company MWH earlier this month, clearing the way for the purchase of Pentex, according to Rodvik.

“That was the formal step necessary that would begin to allow us to evaluate all options,” he said.

The project is the result of high-energy prices in Fairbanks, which in many cases is a critical matter for Interior residents, Rodvik said.

“The cost of space heating has been astronomical,” he said. “The goal has been to reduce the cost of energy and improve air quality, and to come up with the best and most efficient way to deliver affordable natural gas to interior Alaska.”

While the letter is signed, there are several hurdles remaining for the purchase, Rodvik said. First, AIDEA staff will conduct a due diligence review of the deal.

Then they must negotiate a more detailed final agreement before finally presenting a resolution to the AIDEA board of directors, according to Rodvik.

If the deal goes forward as expected, a resolution could be before the board in late April, Rodvik said.

Some unanswered questions about the deal remain, Rodvik said. For example, it wasn’t yet clear whether the deal would have to be approved by Alaska utility authorities. While the sale also won’t affect the intended sale of the Titan Alaska LNG plant to Hillcorp — planned since November 2014, according to the Alaska Journal of Commerce — it wasn’t clear how the property transactions would happen chronologically under state ownership, Rodvik added.

The arrangement would not have been possible without a critical re-think of the project, Rodvik said.

“As a result of us re-evaluating the entire project, this approach has come about as one way to accomplish the goal,” he said.

State ownership would likely not affect natural gas distribution and consumption in the Southcentral area, Rodvik said.

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