Enstar Natural Gas Co., the main gas utility in Southcentral Alaska, is negotiating two new gas supply contracts with Marathon and ConocoPhillips and expects to have the contracts ready by the end of December, for submission to the Regulatory Commission of Alaska for approval, Colleen Starring, Enstar regional vice president, told Petroleum News Nov. 28.
“We’re confident that we’ll be able to get this done by the end of the year,” Starring said.
Unlike previous contracts, these new contracts will unbundle the gas pricing into different tiers for base load, seasonal swing and needle peaking during the extreme demand of cold winter days. Previous contracts have involved a single price rate, regardless of the type of load being supplied.
“The contracts we’re negotiating now are very different from what we’ve seen in the past in a number of ways,” Starring said.
Another key difference between the new contracts and previous contracts will be the shifting of some responsibility for dealing with demand swings to Enstar, rather than placing all responsibility for dealing with those swings on the shoulders of the gas producers.
“The contracts shift the deliverability issue to Enstar and they’re volume driven,” Starring said.
In the deals that Enstar is now negotiating, Enstar will nominate in advance the volumes of gas that it expects to need and then the company will be responsible for obtaining any volumes above those nominated volumes, Starring said.
Enstar is still negotiating the gas pricing in the contracts and cannot yet say what the pricing would be.
“We’re still working on that issue,” Enstar spokesman Curtis Thayer told Petroleum News.
For the complete story see the Dec. 9 edition of Petroleum News