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Vol. 15, No. 43 Week of October 24, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

LNG imports to Southcentral are likely

Faced with an impending utility gas delivery crunch, but with no possibility of North Slope gas coming to the rescue for several years, Southcentral utilities will likely have to import LNG to fill the pending shortfall in utility gas supplies from the Cook Inlet, Colleen Starring, president of Enstar Natural Gas Co., told the Anchorage Chamber of Commerce on Oct. 18 during a question and answer session following her talk on the Cook Inlet Natural Gas Storage Alaska gas storage project.

“At the end of the day we’re probably looking at importing LNG because that’s the only thing we can do given the time schedule that we’re on,” Starring said.

Starring said that Enstar is facing gas deliverability shortfalls as early as 2012, with deliverability becoming a major problem around 2013-14. On the other hand an in-state gas line from the North Slope could not be completed until 2016 or 2017, with a larger North Slope gas line unlikely to go into operation until several years after that.

In negotiations

In fact, Enstar is actively looking at LNG imports as a future supply option, Starring said.

“We are right now in negotiations, discussing importing LNG,” she said. “I’m not ready to come out and start quoting prices, but everything that we’ve seen, and (based on) the information that we’ve been provided and we’ve done an analysis on, importing LNG could be very competitive.”

Asked how the cost of importing LNG might compare with the cost of storing gas for winter use, Starring said that storage will be required, regardless of where the gas comes from.

“(Supply) reliability may become more important than the actual cost or price of the commodity going forward,” Starring said.

—Alan Bailey



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