Mat-Su Valley Frontiersman
Author: Steven Merritt
Sep 25, 2016

WASILLA — The Alaska Railroad will achieve two milestones this week as it works to complete a demonstration project aimed at transporting liquefied natural gas to the Interior.

Part of that testing will involve a longtime LNG facility at Point MacKenzie.

Later this week, the state-owned railroad will ship two specially-designed LNG containers by flatcar to Fairbanks, a first for the state as well as the nation, according to the railroad. The railroad received permission from the Federal Railroad Administration in October 2015 to haul LNG.

The railroad signed an agreement to borrow the two cryogenic containers built by Hitachi High-Tech AW Cryo, a company based in Vancouver, British Columbia, that is partly owned by Japanese manufacturing giant Hitachi. The tanks, which arrived in Anchorage Sept. 11, can be shipped via truck or rail.

In the past two weeks the two 40-foot containers have been the subject of training for both railroad crews and emergency responders, who received instruction on the characteristics of the tanks as well as the LNG itself. The liquefied gas is typically chilled to a temperature of 250 degrees below zero. Both tanks are capable of carrying 7,000 gallons, or some 27,000 pounds of LNG, according to Tim Sullivan, the railroad’s external affairs manager.

Globally, LNG is considered safer to transport than crude oil, as the liquid evaporates quickly if spilled and is not as easily combustible.

According to the railroad, plans call for the containers to be trucked from Anchorage to the Titan LNG facility off Ayrshire Road at Point MacKenzie, where they will be filled and returned to Anchorage. From there, starting Sept. 27, the containers will be loaded onto a railroad flatcar for the 350-mile trip to Fairbanks. The railroad plans eight LNG round trips to Fairbanks over four weeks.

Once in Fairbanks, a flatbed truck will transport the containers 4 ½ miles to the Fairbanks Natural Gas storage facility.

Fairbanks Natural Gas, which provides a supply service in central Fairbanks that serves around 1,100 customers, is owned by the Alaska Industrial Development and Export Authority. AIDEA’s Interior Energy Project is looking at the use of railroad transportation to ship LNG to Fairbanks in conjunction with a broadened gas supply for the city.

Residents in the region pay some of the highest energy costs in the state, and the Fairbanks area often is plagued by poor winter air quality with the burning of wood for heat.

As part of the Interior Energy Project, Fairbanks Natural Gas last winter tested the use of a prototype trailer for shipping LNG via road from the Titan plant as well as from the North Slope. Built in the 1990s, the Titan plant’s feedstock is Cook Inlet natural gas.

Two tanker trucks a day already leave the Titan facility bound for the Fairbanks Natural Gas storage facility, but use smaller trailers. The 75-foot, 13,000-gallon-capacity prototype trailer was an attempt to get a transportation cost estimate on the larger-volume shipment.

While the railroad is hoping is boost sagging shipping revenues with the transport of LNG, AIDEA also is looking to possibly expand Point MacKenzie’s LNG potential. In March, AIDEA announced the selection of Salix Inc. to build a $68 million liquefaction plant that could produce 3 billion cubic feet per year, or some 100,000 gallons a day. The location also would be near the 32-mile Port MacKenzie rail extension, a project that remains incomplete due to state budget cuts.

Salix is a subsidiary of Spokane-based Avista Corp., which runs electric and natural gas utilities in Washington, Oregon and Idaho and also owns Juneau’s Alaska Electric Light and Power.

The Interior Energy Project group is currently in negotiations with Salix on commercial terms for the project, according to AIDEA, and also is working on a gas supply agreement with a Cook Inlet producer.

 

Contact reporter Steven Merritt at 352-2269 or steven.merritt@frontiersman.com