By Associated Press

FAIRBANKS, Alaska (AP) – The board of directors for Interior Gas Utility has agreed to purchase Fairbanks Natural Gas from the state for more than $58 million.

The Fairbanks Daily News-Miner reports that as part of the deal approved Tuesday, Interior Gas Utility would also get a processing plant in Point Mackenzie and transportation trucks.

The state has agreed to provide $125 million in state project financing to help build an expanded natural gas utility system in the region.

The proposal has been met with some pushback, with concerns raised about the price of Fairbanks Natural Gas and whether people would convert to natural gas given the current low cost of heating fuel and wood.

The agreement has been sent to the Alaska Industrial Development and Export Authority for review.