Impending natural gas shortfall spurring action
als are competing with each other, in the end only one will be constructed. It’s still unclear which one, however. There are worries among community leaders that gas and power consum - ers will be stuck with the cost of two plants, but state and federal regula - tors, and the commercial realties, will not let this happen. Both proposals have their advan - tages. The Harvest project can be built quicker and be in operation in time to meet the gas shortfalls, and would cost less than the Glenfarne plan. How - ever, ENSTAR says that Glanfarne’s LNG import plant would be larger than Harvest’s and would better meet the utilities’ long-term needs and be more cost-effective overall, although it would entail more up-front cost and would take longer. However, that can be managed, ENSTAR says. How this will be sorted out is unclear.
liquefied natural gas (LNG) to back - stop regional gas supplies. While there are hopes that the Alaska LNG Proj - ect will proceed to bring North Slope gas to southern Alaska, the extensive $40-billion-plus project has not yet been approved. However, the region’s utilities are legally obligated to assure customers of an energy supply. To give that assurance, Harvest Midstream, an affiliate of Hilcorp Energy, has pur - chased the mothballed former Cono - coPhillips LNG export plant at Nikiski, near Kenai, with planning underway to convert the plant to import LNG. Chugach Electric is working with Har - vest, which would own the plant. ENSTAR, meanwhile, is working with Glenfarne, an energy infrastruc - ture company, to develop a new im - port plant, also at Nikiski. Glenfarne is working separately on the Alaska LNG Project with the Alaska Gasline Development Corp. (AGDC), a state corporation. While the two propos -
Authority (AEA) is continuing its work to expand the Bradley Lake hydro - electric project near Homer that now supplies the state’s least expensive power at 4 cents per kilowatt hour. The state agency has its “Dixon Di - version” project in advanced plan - ning and permitting that would divert more water for storage into Bradley Lake for hydro power generation. AEA has now filed its application for the expansion with the Federal Energy Regulatory Commission (FERC) and expects an approval next year. That will allow construction to be under - way in 2027 and completion sched - uled in 2031. The expansion will ap - proximately double power production and save about 1.8 billion cubic feet of gas yearly that would have otherwise been used to generate power. The region’s utilities are covering their bets, however. Chugach Electric and ENSTAR are working with partners on two options for facilities to import
Inlet producers, regional utilities work on storage Cook Inlet producers and South - central Alaska utilities are hustling to bring new natural gas and energy to the region ahead of projected short - falls in gas supply. Hilcorp Energy, the Inlet’s major gas producer, plans 27 new Inlet gas wells this year and for the first time has two drill rigs fully committed to drilling, Luke Saugier, the company’s vice pres - ident for Alaska, told state legislators in a late January briefing. HEX Alaska, an Alaska-based company, is also drilling more wells from its Inlet platform and is also increasing its production, Mark Slaughter, chief commercial officer for HEX, also told legislators. Utilities in the region are mean - while contracting for more storage of gas in underground reservoirs to meet winter peak demand. Cook Inlet Nat - ural Gas Storage Alaska (CINGSA), a gas storage facility on the Kenai Pen - insula partly owned and operated by ENSTAR Natural Gas Co., was able to help utilities meet high demands for gas withdrawals during cold snaps in December and January without problems, unlike two years ago when mechanical problems threatened to curtail gas during cold temperatures. More extreme temperatures had been forecast that fortunately did not de - velop, ENSTAR CEO John Sims said. Gas storage is becoming more im - portant. Chugach Electric Association, the state’s largest electric cooperative, has now signed an agreement with Hilcorp to store up to 5 billion cubic feet of gas at “Pool 6,” a reservoir also
— Tim Bradner
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Gas storage has become an important topic among producers and utilities.
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on the Kenai where Hilcorp stores gas and is able, thanks to state regulato - ry approvals, to provide gas storage for others. Chugach Electric already stores about 2 billion cubic feet at CINGSA. The new Hilcorp agreement will allow the electric utility to store up to 7 billion cubic feet. Chugach is also studying storage in underused gas reservoir space in the Beluga gas field on Cook Inlet’s west side.
Beluga is owned 60% by Chugach with Hilcorp, which operates the field, owning the remaining 40%. Mean - while, Chugach is diversifying its energy portfolio with a 10-megawatt solar project, to be the state’s largest, now under construction at the utility’s Beluga power station currently not in operation but with power transmis - sion infrastructure still in place. Meanwhile, the Alaska Energy
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