But importing natural gas to generate electricity also could lead to one of Hawai‘i’s two oil refineries shutting down.

That and other key issues deserve further study as state officials consider whether natural gas could provide Hawaiian Electric Co. an alternative to burning fuel oil to produce electricity, said Fereidun Fesharaki, an international energy expert.

The state will need to move quickly, Fesharaki said, because the opportunity to sign economically feasible contracts to buy liquified natural gas could be lost within three years.

“The path is there,” Fesharaki told a breakfast group at Bank of Hawaii this morning. “We can have this in place before the end of this decade. If we want to do it, we need to find a way to make it happen.”

Importing the alternative fuel and building a terminal and facilities could cost up to $275 million and require broad support in order to fast-track such projects through hundreds of permits, Fesharaki said.

He added that liquified natural gas would be a competitively priced alternative to the fuel oil HECO now buys from local refiners, but more study is needed.

It also is possible that the loss of fuel oil sales could lead to the closing of one of the state’s refineries, although exporting oil or other refined products is an option, Fesharaki said.

Because liquefied natural gas occupies 1/600th of the volume of the gaseous form, it becomes cost effective to ship it long distances. Once the fuel reaches its destination, it is turned back into a gas.

Liquified natural gas could help the state reduce dependence on oil imports, which now account for about 90 percent of local energy needs, Fesharaki said.

The long-term nature of natural gas contracts make them less subject to price fluctuations than petroleum, Fesharaki said.