Alaska Railroad arranges LNG test haul

By Jeff Stagl, Managing Editor

Alaska Railroad Corp. (ARRC) has taken another step toward becoming the first railroad to haul liquefied natural gas (LNG) in the United States.

In late September, the regional began a demonstration exercise with two LNG containers to enable crews to become familiar with the gas’s characteristics and safe-handling procedures.

Two 40-foot, intermodal cryogenic tank containers filled with LNG — a natural gas that’s been converted to a liquid for ease of storage and transit — were transported from Anchorage to Fairbanks on Sept. 27 during the trial’s first leg.

Show and tell

The demonstration calls for ARRC to complete eight round-trips with the containers at a rate of two per week through October. Hitachi High-Tech AW Cryo Inc. loaned the containers to the railroad and Fairbanks Natural Gas LLC provided support for the demo.

The trial moves will help ARRC determine the viability and costs of delivering LNG to Alaska’s interior, and demonstrate to shippers the railroad’s ability to safely transport the gas in the intermodal containers, says ARRC Manager of External Affairs Tim Sullivan.

“We want to find out the efficiencies of moving LNG by rail, which we believe can be done in a very efficient manner,” he says.

Via the demonstration, the containers are trucked 70 miles to a Titan Alaska LNG LLC facility near Point MacKenzie, then filled with LNG and returned to ARRC’s yard in Anchorage.

The containers then are loaded onto flat cars and moved 350 miles north as part of the railroad’s overnight train to Fairbanks, where they are transported the last 4.5 miles via flatbed truck to Fairbanks Natural Gas’ storage facility.

Empty containers are loaded onto flat cars and moved southbound on trains heading back to Anchorage. Currently, LNG is trucked to Fairbanks from the Titan Alaska processing plant near Point MacKenzie.

In October 2015, ARRC obtained a two-year permit from the Federal Railroad Administration (FRA) to begin hauling LNG.

The moves can help address the state’s growing energy needs, especially in Alaska’s interior, ARRC officials believe. Interior residents face high home heating costs associated with fuel oil and are seeking a cheaper option. In addition, natural gas is part of a state plan to reduce air pollution caused by wood-burning stoves.

“We can play a part in Alaska’s economy by bringing this lower-cost gas to the interior,” says Sullivan.

Burden of proof

The railroad has worked with the FRA and other federal, state and local agencies to advance the development of LNG as a potential line of business.

Although the demonstration isn’t required by the FRA, ARRC must meet several operating conditions that will be addressed via the trial moves. Demonstration results will be reviewed by the FRA to ensure federal regulators are satisfied with the railroad’s ability to safely move LNG, ARRC officials say.

Ultimately, the customer — Titan Alaska — will decide if moving the gas by rail instead of by truck makes the most business sense, says Sullivan.

“We will sit down with them and talk about the logistics and the cost savings,” he says. “We’ll see how it goes.”