By Matt Buxton

FAIRBANKS — Kayla Parsons, a pipeline welder with Central Environmental Inc., carefully lined up two 100-foot sections of 8-inch polyethylene pipeline Wednesday afternoon with the help of fellow crew members.

Once the two sections were lined up, she used a specialty pipeline machine to trim the edges and then, with an ultra-hot iron, fused them together with an even seal.

The seal, which when done properly is stronger than the body of the pipeline, is one of tens of thousands that are being done this summer as crews assemble the Interior Gas Utility natural gas distribution system in North Pole.

More than 75 construction workers from three companies already have installed 45 miles of gas pipeline throughout the North Pole area. It will be 70 miles by the end of the summer.

It was just three years ago that the Interior Gas Utility existed only on paper, one in a long string of ideas and plans to bring more low-cost energy to the Fairbanks and North Pole area.

The pace isn’t lost on David Prusak, the project manager for the Interior Energy Project, who has more than 20 years of experience with natural gas utilities.

“A year ago, July 1, we owned a pencil and some paper clips and now we’re ordering 80 miles of pipeline,” he said. “This project is a game changer.”
But once crews finish installing the pipe, clean up the construction sites and head home, the future of the distribution system will remain unclear.

This summer’s construction is the first of many planned phases of construction. Prusak said continued construction isn’t a sure thing as long as the state doesn’t know when or where new gas will come from.

“What we’re doing here in Phase 1 we can replicate in all the other phases,” he said. “I would love to start building, but that might not happen until they can get confident in at the gas supply.”

The source of natural gas for the Interior was largely sent back to the planning stages early this year when an effort to get gas from the North Slope came up with a gravel pad and gas that was more expensive than the community found acceptable.

Currently, the state has opened bids to any company that can bring natural gas or propane to the Interior, regardless of source or method of transportation. That includes natural gas from Cook Inlet and propane from Canada by all sorts of means of transportation, including truck, pipeline and rail.

The next phase of construction, which is still scheduled for next year, would extend the natural gas distribution system north of Hurst Road.
It largely depends on whether or not the Alaska Industrial Development and Export Authority, the organization in charge of the overall Interior Energy Project, releases the funds.

“The timing of gas delivery is dependent, in a large way, on the responses we receive to the request for proposal for energy supply to the Interior,” AIDEA spokesman Karsten Rodvik said. “It is likely the utilities would want to time additional build-up with the arrival of gas.”

What’s also unclear is how the state’s purchase of the company Fairbanks Natural Gas will affect the Interior Gas Utility. One long-term plan would be to merge the two into one mega-utility serving the borough, but just when that will happen and how it will look is still being discussed.

AIDEA’s schedule has the state signing an agreement with the borough over consolidation by the end of this year, with the merger and consolidation taking place in 2016.

“The merger efforts begin with the selection of a local control entity, and this process is moving forward in a good way,” Rodvik said. “IGU, Golden Valley Electric Association and the city of Fairbanks have expressed interest in acting as the local control entity, and we have begun initial discussions with our eye on the Dec. 31 target to have the selection firmed up.”

Rodvik said just how the two will merge and how it will affect the planned phases is still under discussion. The Interior Gas Utility’s system was designed to exist outside the area served by Fairbanks Natural Gas.

“Our planning for the physical merger of the system is progressing as well,” he said. “We’ve begun modeling a combined distribution system, and this fall we expect to have a consolidated utility design meeting.”

The purchase of Fairbanks Natural Gas and its parent company, Pentex, was approved earlier this year by the AIDEA board. That deal is expected to close Oct. 15.

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.