July 30, 2024 [Pipeline & Gas Journal]- The Regulatory Commission of Alaska has given conditional approval to Alaska Pipeline Company LLC’s (APLC) plan to construct a $57 million pipeline extension, aimed at facilitating the import of liquefied natural gas (LNG) through a new terminal at Port MacKenzie.
The project, known as the “Port MacKenzie Expansion,” aims to extend APLC’s existing pipeline infrastructure to connect with a future LNG import terminal. This strategic extension is intended to bolster the natural gas supply for southcentral Alaska, enhancing the region’s energy security.
The proposed pipeline extension is estimated to cost $56.6 million. APLC anticipates no revenue from transportation in the first normalized year of operation, with projected annual expenses totaling $675,537. The expansion will be managed by APLC’s existing personnel, who will oversee design, installation, maintenance, and repair activities.
APLC, which has served the region for nearly 63 years, operates pipeline facilities spanning from the Mat-Su Valley to the southern Kenai Peninsula. These facilities are regulated in conjunction with ENSTAR Natural Gas Company, APLC’s sole customer.
APLC filed an application to amend its Certificate of Public Convenience and Necessity No. 141 on May 20, 2024, seeking authorization for the pipeline expansion. The company also requested expedited consideration for a swift decision but later supplemented its application in response to inquiries from the Commission Staff.
Despite the expedited request, no public comments or competing applications were received by the set deadlines. The Regulatory Commission subsequently approved the application with conditions, denied the expedited motion as moot, and granted confidential treatment for sensitive information.
While the project has received regulatory backing, APLC acknowledged that it still requires several approvals and authorizations. The company plans to secure these as ENSTAR and other utilities finalize their investment decisions regarding the LNG import terminal.
APLC confirmed it is not seeking cost recovery for the expansion through the current application, with any future cost recovery to be addressed in a separate rate case filing, subject to Commission approval.
The Port MacKenzie Expansion represents a significant development in Alaska’s energy infrastructure, potentially strengthening the natural gas supply chain and supporting the state’s economic growth. With regulatory support in place, APLC and ENSTAR are positioned to advance this critical project, contingent on final investment decisions and necessary approvals.
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