More gas storage for the Cook Inlet?

Officials from Alaska’s Division of Oil and Gas have indicated that the division is looking for someone to open another Cook Inlet gas storage facility.

Currently there are three gas producer-operated gas storage facilities around the inlet. Two of these are in state lands at Pretty Creek and in the Kenai gas field, while the third facility is in the Swanson River field in federal land. The division hopes now that someone will start up a fourth storage for the use of third-parties.

“We’re looking at a fourth storage facility and will be working with a potential lessee in the winter of 2010,” division Director Kevin Banks told the Senate Resources Committee on Feb. 9.

And at a public meeting of the Regulatory Commission of Alaska on Feb. 11 Alan Dennis, the division’s royalty manager, said the division had sent a questionnaire about gas storage needs to businesses, including gas producers and utilities, that might have an interest in gas storage. The division has begun discussions with a number of different interested parties, with the Nicolai Creek field, the Lone Creek field and the Kasilof field having been discussed as candidate locations for a new storage facility, he said.

The availability of a gas storage facility to any gas producer that needs it would change the dynamics of the Cook Inlet gas market by opening the possibility of a producer selling gas to a utility during the summer for later use during peak winter demand, Dennis explained.

Petroleum News will include more detailed reports on the Senate Resources Committee and RCA presentation in the Feb. 22 issue of the paper.