This story has been updated to correct the delivery date of natural gas to the Interior. Natural gas is planned to reach the Interior in mid to late 2016.

FAIRBANKS — The state agency overseeing the Interior Energy Project announced continued progress on Friday on a project to truck North Slope natural gas to the Fairbanks area for home heating and electricity generation.

The Alaska Industrial Development and Export Authority and project development firm MWH inked an agreement outlining the construction, ownership and operation of the North Slope liquified natural gas plant that’s central to the whole project.

According to a press release announcing the agreement, the state agency will own the plant while an MWH subsidiary, Northern Lights Energy, will build, operate and maintain it. Northern Lights will also sell the LNG produced by the plant to Fairbanks-area buyers. The agreement also allows the development of a financing structure for the plant, which is designed to be a mixture of public and private funds.

The agreement also allows Northern Lights to begin working out contracts — outlining the volume of gas and how much it’ll cost — with Fairbanks-area utilities. Fairbanks Natural Gas, the municipal Interior Gas Utility and Golden Valley Electric Association have all expressed interest in buying the gas.

The announcement also came along with the news that the 15.4-acre gravel pad for the North Slope has been completed. The project is located just south of Flow Station 3 in the Prudhoe Bay Unit.

The Interior Energy Project is the product of a bill approved by the Alaska Legislature and signed by Gov. Sean Parnell in 2013.

It makes more than $300 million of cash, low-interest loans and tax credits available for the gas trucking project. Funds have also been made available to Fairbanks Natural Gas and the Interior Gas Utility for gas storage and distribution system design and construction.

First gas to the Fairbanks area is expected sometime in mid to late 2016.

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