Alaska to ship LNG by rail

ANCHORAGE, Alaska, Sept. 21 (UPI) -- On Tuesday, an Alaskan rail company said it will become the first of its kind in the United States to haul cargo of liquefied natural gas.

Alaska Railroad said it's been working with the Federal Railroad Administration since October to review options to deliver liquefied natural gas, with its first demonstration cargo set for delivery Sept. 27. With that, the company said it will be the first one in the country with the federal authority to move the super-cooled gas by rail.

"Containers will be trucked 70 miles to the Titan LNG facility near Port MacKenzie where they will be filled with Alaska LNG, before returning to the Anchorage rail yard to be loaded onto a railroad flatcar and hauled 350 miles north as part of a northbound overnight freight train to Fairbanks," the company said in a statement.

The Alaska Oil and Gas Association said close to 90 percent of state revenue has come from oil and natural gas development since Alaska became a state in 1959. With energy prices on the downturn, Gov. Bill Walker has tried to move the state economy through a multibillion dollar deficit as many of the state pipelines are running at less than full capacity.

In July, the governor appointed John Hendrix, a veteran with BP and former general manager for Apache Alaska, as the chief oil and gas advisor for the state. Walker said the former executive, who was part of BP's first operations in Russia, will help steer Alaska through a weak period in the oil economy.

Last year, the U.S. Energy Department gave conditional consent for the Alaska LNG Project to ship LNG sourced from domestic reserves to countries that don't have a free-trade deal with the United States. The LNG project, valued at more than $40 billion, includes a gas treatment facility, pipeline infrastructure and a liquefaction plant.

Sen. Lisa Murkowski, R-Alaska, said her state has more than 35 trillion cubic feet of gas on hand on the North Slope.

The Alaska rail company said crews during the demonstration project will work to become familiar with safe handling procedures, with first responders coordinating as well.