Stranded businesses may get gas from Enstar

Even without two supply contracts still pending regulatory approval, Enstar Natural Gas might be able to use an existing contract to serve stranded businesses in Anchorage.

Testifying before the Senate Judiciary Committee on Nov. 25, ConocoPhillips executives suggested their company could make gas available to Enstar through an existing contract.

The Beluga River contract is the oldest and most expensive of the contracts comprising the Enstar portfolio. Signed in 1982, the contract supplies gas produced from the Beluga River field, owned by ConocoPhillips, Chevron and the Municipality of Anchorage.

“What we’re saying is that if there’s supply available, that we would make it available if they called on it,” said Dan Clark, manager of Cook Inlet assets for ConocoPhillips.

The hearing came after gas supplier Aurora Power Resources dropped around 400 commercial customers on short notice. Enstar offered to supply those customers through the end of the December, but said it couldn’t continue service into next year without the gas supplies available through two contracts being renegotiated for regulatory approval.

“We don’t have enough gas under contract to supply those customers,” Enstar’s Mark Slaughter told the Senate Judiciary Committee.

Sen. Hollis French, D-Anchorage, the Judiciary chair, called the letter “a ham-handed effort to notify folks that there was a supply shortage when in fact the gas is out there, and you guys know the gas is out there. And I think the likelihood that you’re going to screw the valve shut on those 400 businesses is vanishingly small.”

If the Regulatory Commission of Alaska doesn’t approve the two new contracts, and if ConocoPhillips sells Enstar additional Beluga River gas, the 400 stranded businesses would be charged a premium. Because it’s indexed to oil, the Beluga River contract is the most expensive in the Enstar portfolio, priced at $11.20 per thousand cubic feet.

State regulators approved the two new contracts in October under the condition that Enstar, ConocoPhillips and Marathon renegotiate the prices using a new formula.

—Eric Lidji