GVEA, Flint Hills Resources Alaska Sign MOU on LNG Project (USA)

Golden Valley Electric Association and Flint Hills Resources Alaska have commenced engineering on a natural gas liquefaction facility on Alaska’s North Slope. The two companies have signed a memorandum of understanding to exclusively negotiate agreements to construct and operate a facility that would enable liquefied natural gas to be trucked to the Interior by first quarter 2014.¬†

GVEA would use the gas to power its newest turbine at the North Pole Power Plant. Flint Hills would use the gas as a supply fuel for the refining process at its North Pole refinery.

The deal would deliver gas “at cost” to each company. Lower costs mean lower rates to GVEA members. Flint Hills would become more competitive and efficient by burning LNG instead of refined crude oil in its refinery.

We are excited about this bridging project,” said Brian Newton, president and CEO of GVEA. “GVEA and Flint Hills are customers of each other and this is a continuation of our ongoing relationship. Flint Hills brings the expertise and financial strength to work with us to make this project a reality.

While GVEA supports a gas pipeline to Fairbanks, trucking LNG would lessen our dependence on high-priced oil thereby bringing energy cost relief sooner than other proposed projects.”

We work closely and well with GVEA,” said Mike Brose, Flint Hills vice president and plant manager. “This project would partially eliminate the competitive disadvantage for our refinery due to high energy costs, and provide an environmental benefit to Fairbanks and Interior Alaska. We are also excited about additional opportunities such as propane production and LNG diesel production to provide more competitive clean fuel for Alaska’s trucking and transportation industry.”

Engineering for the project is underway. The objective is to have LNG available in North Pole by the first quarter of 2014. LNG could also be made available to other users and distributors of LNG in Fairbanks and Interior Alaska.

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Source: GVEA, August 5, 2011;

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