The Regulatory Commission of Alaska has approved the new gas supply contract between Anchor Point Energy LLC and Enstar Natural Gas Co. for the sale of gas from the North Fork gas field in the southern Kenai Peninsula to Enstar.
“We have considered the filings presented by Enstar in support of the proposed Anchor Point Energy gas supply agreement and the additional information filed in response to our request,” said RCA Chairman Robert Picket in a Nov. 5 letter order to Enstar. “Based on the record presented in the tariff proceeding, we find that the public interest is best served by approval of the Anchor Point Energy GSA at this time.”
The RCA order came as a result of a decision by a majority of the commissioners, with Commissioners Kate Giard and Janis Wilson dissenting.
The gas pricing in the new contract is indexed to a three month average of natural gas futures on the New York Mercantile Exchange, but with an inflation-adjusted floor price of $6.85 per thousand cubic feet and an inflation-adjusted price ceiling of $9.90 per thousand cubic feet.
Anchor Point Energy is owned by the five working interest owners of the North Fork unit. Armstrong Cook Inlet, a subsidiary of Denver-based Armstrong Oil and Gas, is unit operator and has been working since 2007 to develop the North Fork field.
“We’re real excited that the contract got approved,” Bill Armstrong, CEO of Armstrong Oil and Gas, told Petroleum News today. With the uncertainty surrounding contract approval now removed, Armstrong will move ahead with developing the pipeline for exporting gas from North Fork, and probably with a 3-D seismic survey, as a precursor to drilling more wells in the unit, he said.
“Enstar is pleased to add a new, independent producer to its gas supply portfolio, said Colleen Starring, president of Enstar, in a release issued today. “This agreement represents an important step toward meeting our customers’ needs.”
See story in Nov. 15 issue, available online at noon, Friday Nov. 13, at www.PetroleumNews.com