NEWS BULLETIN

April 15, 2016 --- Vol. 22, No. 20April 2016

RCA approves Enstar's gas supply agreement with Hilcorp

The Regulatory Commission of Alaska has approved Enstar Natural Gas Co.'s new agreement with Hilcorp Alaska for a supply of natural gas between April 1, 2018, and March 31, 2023. The contract, with a committed supply of about 22 billion cubic feet per year of gas, will fill approximately 70 percent of Enstar's supply needs, thus leaving space in Enstar's supply portfolio for other producers. The commission is still reviewing another supply contract with Furie Operating Alaska - that contract would add another 6.2 billion cubic feet per year to Enstar's supplies, starting in April 2018.

The gas price under the Hilcorp contract is around 9.2 percent less than that in an earlier contract with Hilcorp that expires on March 31, 2018. The pricing in that earlier contract is tied to a pricing consent decree between Hilcorp and the State of Alaska.

In an April 13 letter to Enstar approving the new Hilcorp contract, Commission Chairman Robert Pickett commended Enstar and Hilcorp for meeting an intent of the state Legislature by establishing diversified supply contracts with different pricing mechanisms.

- ALAN BAILEY

See story in April 24 issue, available Friday, April 22 at www.PetroleumNews.com


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