While Cook Inlet utilities were concerned about a lack of natural gas supplies in 2012, Friday’s update from ENSTAR natural gas made it apparent that the status of Cook Inlet gas has changed significantly.
Manager of gas supply Inna Johansen with ENSTAR says Hilcorp Alaska entering the gas production market in the Cook Inlet was a positive development.
Johansen: “Currently we’re looking at two new agreements that would allow ENSTAR to meet our customers’ supply needs from 2018 all the way to 2023, at very favorable pricing compared to the consent decree.”
ENSTAR’s two agreements with Hilcorp and Furie Operating Alaska will begin on April 1, 2018 if approved by the Regulatory Commission of Alaska. The contract with Hilcorp would bind them to approximately 70 percent of ENSTAR’s anticipated demand.
Johansen says she believes that to sustain the current positive supply environment that companies will need to continue exploration in the Cook Inlet.
Johansen: “It takes about two years to start a drilling program and bring those supplies to the market.”
ENSTAR Spokeswoman Lindsay Hobson says they expect demand over the next five years or so to remain flat, barely fluctuating by about one percent each year.
Johansen says the only large project on the horizon that could impact the amount of gas needed is the proposed Donlin Gold Mine, which has incorporated plans to build into ENSTAR’s gas system. Donlin is still moving slowly through the permitting process but if built in southwest Alaska, the project would be the world’s largest gold mine.
Johansen says right now, the Kenai Peninsula has a steady reliable gas supply for the next five years.