Marathon Oil Corp. and Cook Inlet Natural Gas Storage Alaska, CINGSA, said late this afternoon that they have reached an agreement toward meeting CINGSA’s base gas supply shortfall (see stories in Aug. 19 and Aug. 26 issues of Petroleum News).
In a joint statement the companies said that Marathon Oil’s wholly owned subsidiary, Marathon Alaska Production LLC, has begun transferring gas from its storage facility at the Kenai gas field to CINGSA’s storage facility.
“We appreciate Marathon’s offer to sell additional gas volumes that help CINGSA meet our ‘base gas’ requirements,” CINGSA Vice President Colleen Starring said in the statement.
Wade Hutchings, Marathon Oil’s Alaska asset manager, affirmed the company’s previous statements that “there was no breach of the gas sales agreement between Marathon and CINGSA,” and said Marathon was pleased to be “able to make available to CINGSA additional supply from our storage.”
CINGSA is completing work on the gas storage facility and had informed the Regulatory Commission of Alaska earlier in August that it did not have the volume of base gas needed to ensure optimum rates of withdrawals by customers, blaming an unnamed producer with which it said it had contracted for 3.24 billion cubic feet of base gas.
Marathon acknowledged that it had a gas sales contract with CINGSA, but said it did not contract on an exclusive basis, had complied fully with the terms of the agreement and disputed claims to the contrary.
See story in Sept. 2 issue of Petroleum News, available online Friday, Aug. 31 at www.PetroleumNews.com