By Matt Buxton,

JUNEAU—The state is pushing ahead with plans to expand natural gas distribution in the Fairbanks area.

The Alaska Industrial Development and Export Authority on Friday approved a $29.6 million loan to the municipal Interior Gas Utility to continue construction and development of a gas distribution system in North Pole and other medium- and low-density areas of the borough.

The funding, according to an AIDEA news release, will allow the utility to put 73 miles of pipe in the ground this summer, serving 2,100 homes and 140 multi-family or commercial buildings.

The funding also will allow the utility to prepare for the next two planned phases of construction northwest of North Pole. The loan will let IGU “continue right of way acquisition, purchase equipment and materials, install temporary storage and perform design work for Phases 2 and 3 of their distribution system.”

Steve Haagenson, general manager for the Interior Gas Utility, said AIDEA’s action early in the year will allow work to continue on time.

“Construction in North Pole is exciting and indicates we are one step closer to reducing energy prices for Interior residents,” he said.

Some 165 construction jobs are anticipated to be created, according to the news release, as well as 35 to 40 additional professional positions for other elements of the infrastructure project.

Last year AIDEA approved loans both for the Interior Gas Utility and Fairbanks Natural Gas to begin the buildout of each distribution system.

Still, just where the gas that will serve the 73 miles of pipe will come from is unclear. AIDEA, with the blessing of Gov. Bill Walker, is exploring the purchase of Fairbanks Natural Gas and the natural gas supply chain from Cook Inlet to Fairbanks owned by FNG’s parent company, Pentex.

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