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RCA to hold Enstar gas storage workshop Utility wants to ensure smooth process for certification of facility that is critical to meeting deliverability needs in 2011 Alan Bailey Petroleum News
The Regulatory Commission of Alaska has agreed to schedule a technical workshop in December to review plans being developed by Enstar Natural Gas Co. and Houston-based ANR Pipeline Co. for the development of a new gas storage facility in the Cook Inlet basin. ANR plans to operate the storage as a third-party facility, available to anyone who needs to store gas.
Enstar, the main Southcentral Alaska gas utility, faces a winter 2011 shortfall in gas deliverability, the rate at which the utility can deliver gas to its customers, unless new gas supplies or storage facilities become available between now and then. At RCA’s Nov. 12 public meeting, Enstar presented an overview of the proposed gas storage project and asked RCA to schedule the workshop, to help ensure efficient progress in certifying the storage facility — Enstar and ANR are fast-tracking the facility development to meet the winter 2011 deadline for storage operation.
Opportunity for questions “The workshop would allow all of the interested parties and stakeholders an opportunity to express their questions and issues, as we move forward with this storage project,” Colleen Starring, president of Enstar, told the commissioners. “… It’s absolutely critical from Enstar’s perspective that we have storage in place by the winter of 2011, and that would mean that we’d be injecting gas into this facility during the summer of 2011.”
ANR may apply to RCA for a certificate of public convenience and necessity for the facility as soon as January 2010, and there could be additional filings consequent to that application being submitted, with the possibility of facility design changes to accommodate potential gas storage customers.
In fact, Enstar would encourage any utility with an interest in using the facility to attend the workshop. It would also be beneficial for gas producers to attend, if producers foresee any issues with the gas storage operation — operation of the new facility might, for example, impact the operation of existing producer-operated gas storage, Starring said.
Enstar hopes that an outcome of the workshop will be a clear understanding of how the utilities would recoup the cost of storage from their customers. The cost of current producer-operated storage is recovered within the prices that the producers charge Enstar for the supply of utility gas.
Multiple benefits And Enstar sees access to third-party storage of the type that ANR intends to build as providing multiple benefits: The storage will be critical in helping Enstar meet peak demand during the winter; by enabling Enstar to buy gas during the summer to store for the winter, the utility’s year-round gas purchasing requirements will be more appealing to producers; storage will provide a backup gas source, in the event of some gas supply problem; and the cost of gas storage will become more transparent to gas consumers.
“Storage is critical to Enstar’s future,” Starring said. “It’s important to our customers. It will address the deliverability challenges that we’ve been facing … and it will also provide reliability insurance to our customers over a long term. Storage will become a permanently valuable resource to all of our customers.”
Enstar and ANR have yet to establish which gas field ANR will use for the storage facility, but they anticipate achieving a storage capacity of up to 15 billion cubic feet, probably in a field that is somewhat depleted but which is still producing gas. Gas remaining in the field would form pad gas, the gas that maintains the reservoir pressure required to force stored gas out through production wells. The purchase of this pad gas would form a major component of the capital cost of the storage project.
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