Hilcorp Alaska Gas Storage, a recently formed subsidiary of Hilcorp Alaska, has applied to the Regulatory Commission of Alaska (RCA) to approve the creation of a new gas storage facility on the Kenai Peninsula. With the facility, Hilcorp hopes to address a potential gas shortage during winter months in Southcentral Alaska, a threat that has become more real in recent years.
The subsidiary filed the application for permission to operate the facility at the Kenai Gas Field, south of Kenai.
The proposal responds to growing concerns about gas supply in the region, especially following an extra cold period in Jan. 2024. The cold, coupled with the failure of a pair of wells operated on the Kenai Peninsula by Cook Inlet Natural Gas Storage Alaska (CINGSA), nearly triggered an energy rationing failsafe that would have required residents to reduce energy use.
Kenai Peninsula Republican Senator Jesse Bjorkman believes an additional facility on the Kenai Peninsula could lessen the supply burden on local energy providers. “I think having a redundancy of available gas, it can be a really great option for both the Enstar utility as well as HEA so that we know that we’re going to have natural gas supply when we hit peak demands in cold winter months,” Senator Bjorkman said. “With those options, we [would be] able to recover more gas storage in an efficient manner and then meet the needs of people who want to keep their lights on and homes and businesses warm.”
Additional storage, however, is just a part of the solution, says Kenai Peninsula Borough Mayor Peter Micciche.
“Alone, it solves very little, but once adequate new natural gas supplies are identified or produced, Hilcorp’s Swanson River Gas Field storage, coupled with CINGSA storage (both adequately filled by November each year), will ensure the Railbelt of secure volumes of natural gas for winter electrical generation and space heating for a very long time,” said Mayor Micciche in a text to KSRM News.
“Empty cases of salmon jars feed no one,” the Mayor went on to say. ” New gas supply volumes remain a necessity by 2027/28, or the empty storage will serve no real purpose. Both new storage and new gas are necessary, but it’s important that Alaskans understand that new storage alone does not magically create energy security for Southcentral Alaska.”
The filing notes that the facility could provide backup capacity in case of another cold spell or well failure, ensuring sufficient gas is available for heating and electricity generation.
Julie Hasquet, spokeswoman for Chugach Electric Association, emphasized the importance of additional storage for managing supply disruptions caused by issues with production or pipelines.
“The fluctuating nature of LNG supply, combined with the need for continuous service, requires sufficient storage to manage both local and imported gas effectively,” Hasquet told the Anchorage Daily News. “Storage also allows utilities to store surplus gas during warmer months and release it when demand peaks, ensuring a stable supply. That is, it provides another mechanism to balance supply and demand.”
Currently, Chugach and other utilities are fully booking CINGSA’s capacity, and more storage space is needed to meet demand, particularly if LNG imports are required.
Matt Shuckerow, a spokesperson for Hilcorp, told ADN the company is committed to working with utilities and regulatory agencies to make its gas storage assets available for commercial use.
The filing argues that the second storage facility would benefit Southcentral Alaska by offering more diverse storage options, preventing supply disruptions, and supporting economic stability.
The Regulatory Commission of Alaska is set to review the proposal, with the potential for the new facility to become a crucial part of the region’s energy infrastructure
