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RCA denies APE’s request for waiver Requires Armstrong, partners to submit two years of financial data in order to get CPCN; Enstar pegs early March startup date Eric Lidji For Petroleum News
Alaska regulators have denied Anchor Point Energy’s request to waive certain financial requirements as part of its efforts to operate a new pipeline in the southern Kenai Peninsula.
Anchor Point Energy, a subsidiary of Armstrong Oil and Gas and its four partners, recently applied for a certificate of public convenience and necessity to operate the new North Fork Pipeline. The pipeline runs 8 miles from the North Fork unit, north of Homer, to the city of Anchor Point, where it will connect into the Southcentral grid.
Normally, a company applying for the certificate must also provide two years of audited financial statements for all the companies with an ownership interest in the business.
Anchor Point asked for a waiver of that requirement.
Anchor Point tried to make the case that the North Fork Pipeline was a fairly risk free business and that the companies involved with running it were financially stable.
Application incomplete For instance, Anchor Point noted that it didn’t expect any “significant capital needs” once the pipeline went into operation and that its “revenues are virtually guaranteed” because Enstar Natural Gas is committed to buying North Fork gas under an approved long-term contract. In addition, Anchor Point said it has “no debt” and is “adequately insured.”
The Regulatory Commission of Alaska issued a public notice about the waiver request in early January, and received no comments, but ultimately denied Anchor Point’s request because the company “failed to show good cause for waiver of the requirements.”
Because the RCA denied the waiver, the entire certificate application became incomplete.
Now, Anchor Point will need to reapply. The company previously asked the RCA to allow it to operate the pipeline on a temporary basis in order to complete final tests.
Anchor Point must file a new application by the end of February. Armstrong previously said it could bring North Fork online by mid-February, under good circumstances.
Enstar aiming for March Once complete, the North Fork Pipeline will connect to the South Peninsula Pipeline (previously known as the Anchor Point Pipeline). The Alaska Pipeline Co., a sister company of Enstar Natural Gas, is building that line. The SPP would in turn connect to the Kenai Kachemak Pipeline that feeds into the Southcentral regional transmission grid.
Enstar believes its new pipeline could be ready by early March.
The RCA is currently considering an interconnection agreement between the South Peninsula/Anchor Point Pipeline and the Marathon-operated Kenai Kachemak Pipeline.
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