Gasline on Wheels: IGU winning the race to commercialize North Slope gas.

• Author: O'Hanley, Tara

The first pipeline to take natural gas off the North Slope has wheels. After decades of hopes and dreams, plans and schemes, the route to marketing the state's stranded gas wealth runs not through Canada, Valdez, or even Nikiski but through Fairbanks. And it's coming on trucks.

Interior Gas Utility (IGU), a natural gas distributor owned by the Fairbanks North Star Borough, is breaking the North Slope gas deadlock thanks to a confluence of constrained supply amid growing demand.

"Interior Gas Utility is in a rather steep growth trajectory," explains Elena Sudduth, IGU's Director of Public Relations and Customer Service/Marketing Manager. "In the last couple of years, we have pretty much doubled the number of customers that we have. We currently have about 2,200 customers, and we plan to continue adding customers at a rate of 600 customers per year for the foreseeable future."

In 2022, IGU installed 635 service connections to new customers. However, one new customer on the horizon could ramp up demand considerably. As a result of the publication of the final draft Environmental Impact Statement for revamping the US Army's oldest power plant--Fort Wainwright--it now appears very likely that IGU's production demand will more than double within the next few years.

All of this is a business dream come true, right? Well, it would be--assuming an available supply of liquified natural gas (LNG).

Currently, IGU trucks its gas from the Matanuska-Susitna Borough, drawing from the same resource that powers much of Southcentral Alaska. In April of last year, however, Hilcorp notified its customers that, due to dwindling reserves, it might not be able to renew contracts for drilling in Cook Inlet after 2032. As IGU General Manager Dan Britton explains, "They indicated that they did not have a line of sight beyond their current contractual commitments that they have to us, ENSTAR (Natural Gas Co.], Chugach Electric [Association], Matanuska Electric (Association], and others, how they would meet the total demands that they are today, in the future." Given that Hilcorp supplies upwards of 80 percent of natural gas to the region, this was a cause for immediate concern, even though contracts won't expire for years to come.

"Because we needed that additional liquefaction capacity, we needed to make a decision now," Sudduth explains. "So we started looking at our options."

At a board meeting in January, Britton gave a lengthy presentation of the different...