January 05, 2011 --- Vol. 17, No. 2January 2011

RCA sets service area for CINGSA

Responding to a petition from Cook Inlet Natural Gas Storage Alaska, requesting a change to the Regulatory Commission of Alaska’s Dec. 17 order that granted a certificate for CINGSA’s planned gas storage facility on the Kenai Peninsula, RCA has approved a service area for the facility, in the Sterling C sands of the Cannery Loop gas field on the south side of the city of Kenai. In an order issued Dec. 30 the commission has also dropped a stipulation that if CINGSA had not by Dec. 30 acquired the necessary property rights for operating the facility the commission would have cancelled an upcoming hearing to review testimony on the facility’s tariff.

The commission’s Dec. 17 order had not spelled out the storage facility’s service area, but had merely required the facility to be in reasonable proximity to the Cook Inlet natural gas pipeline system. Without a specified service area CINGSA would not have the power of eminent domain over the land that it requires for the facility. And, given the 45 individual landowners with rights in the land that CINGSA needs, the absence of eminent domain authority would make it all but impossible to negotiate workable deals with all of the relevant property owners, thus making the RCA certificate unusable in practice, CINGSA had said in its petition.

The tariff hearing will now proceed, starting on Jan.7 and lasting until Jan. 14. CINGSA is trying to fast track development of its facility, to head off an otherwise likely Southcentral Alaska utility gas shortfall in the winter of 2012-13.

Armstrong: North Fork gas sales could begin in early March

Armstrong Cook Inlet believes it can bring the North Fork unit online as early mid-February, if Alaska regulators give the independent permission to operate a new pipeline.

“The pipeline could be ready for operation as soon as mid-February and initial commissioning and testing cannot occur without operation of the pipeline,” Ed Kerr, vice president of Armstrong, wrote in an affidavit.

“For this reason, Anchor Point Energy hopes to begin deliveries of gas via the pipeline as early as mid-February, 2011, or within several weeks thereafter. Enstar wishes to receive service as soon as possible.”

Anchor Point Energy, created by Denver-based Armstrong and its four partners, plans to market North Fork natural gas through a new pipeline, called the North Fork Pipeline.

The 7.4-mile dual pipeline will run from a production pad at the North Fork unit to Anchor Point, where it will connect to an extension of the Kenai Kachemak Pipeline.

The North Fork unit is in the southern Kenai Peninsula, 10 miles north of Homer.

Anchor Point Energy completed the first phase of the pipeline last year, according to the State Pipeline Coordinator’s Office.

The first phase covered about one sixth of the total length of the line, more than a mile of standard steel piping. Anchor Point Energy conducted hydro-testing on that portion of the pipeline in mid-December 2010.

Surveying and pre-construction site work is already under way for phase two. The remainder of the pipeline will be constructed from Fiberspar LinePipe. That material is already on site, and Anchor Point Energy is in the process of preparing the right of way.

Because the North Fork Pipeline crosses state land, the Alaska Department of Natural Resources is requiring it to be regulated as a common carrier pipeline, even though Armstrong and its partners would be the only customers on the pipeline for the foreseeable future, and Armstrong said the pipeline “functions as a gathering pipeline.”

That means Armstrong needs a certificate of public convenience and necessity, a process that can take up to six months to complete under existing regulatory timelines.

Armstrong wants the Regulatory Commission of Alaska to either expedite its decision or give Armstrong temporary authority to begin pipeline operations. Armstrong said that final testing requires the pipeline system to be entirely operational.

If the RCA approves the CPCN by the end of January, Armstrong believes sales could begin in early March.

See full story in the next issue of Petroleum News, online Friday, Jan. 7, by 11 a.m. Alaska time, at

DNR opens western coastal area for tundra travel

The Alaska Department of Natural Resources today opened the western coastal area of state land on the North Slope for off-road tundra travel. Conditions in the area have met the required criteria of six inches of snow and soil temperatures of minus 5 degrees C or less at a 30-centimeter depth, DNR said.

State lands in Arctic Alaska have seen especially deep snows so far this winter, but the snow cover has insulated the underlying tundra, thus slowing the cooling of the ground and delaying the opening of the land for travel by vehicles not certified for summer tundra use.

The eastern coastal area, and the upper and lower foothills areas, all remain closed. And, DNR has reminded operators that they must have off-road travel permits to drive across land, even in areas that have been opened. And, although overall snow cover is good, operators must avoid any areas where the snow cover is thin.

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