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Kenai Kachemak Pipeline LLC gets temporary certificate; construction has started The Regulatory Commission of Alaska is still considering guarantees, which were made to DNR for the right of way, but issued certificate so that construction work on project would not be delayed Kristen Nelson PNA Editor-in-Chief
Clearing began the week of Jan. 6 and construction was slated to begin Jan. 15 on the Kenai Kachemak natural gas pipeline on the Kenai Peninsula.
The Regulatory Commission of Alaska said Jan. 9 that it had granted an emergency motion filed by Kenai Kachemak Pipeline LLC for a temporary certificate of public convenience and necessity for construction of its 12-inch gas pipeline. The commission had conditionally granted a certificate in December, subject to KKPL filing unconditional guarantees from a financially acceptable entity for GUT LLC and from Marathon Oil Co.
KKPL filed unconditional guarantees Jan. 3 and told the commission the guarantees were submitted to the state through the commissioner of the Department of Natural Resources. The guarantees were filed with the state pipeline coordinator in connection with the application of KKPL for a state right of way lease for the pipeline.
KKPL filed an emergency motion Jan. 7, stating that it had filed the necessary unconditional guarantees the commission required in its conditional certificate. KKPL said its contractor was prepared to begin construction Jan. 10, but would not be able to begin until KKPL had a certificate or temporary certificate in hand. KKPL also said it would not be able to meet its in-service date unless construction began soon after Jan. 1.
Right of way clearing began the week of Jan. 6 and construction was slated to begin Jan. 15, Unocal Alaska spokeswoman Roxanne Sinz told Petroleum News Alaska Jan. 13. The first shipment of pipe was due Jan. 10, she said, coming in from Lone Star Steel in Texas by rail barge and then being transported by the Alaska Railroad. Houston Contracting was to begin work on construction Jan. 15 and installation was slated to begin the week of Jan. 23. Construction is to be complete in August, Sinz said. Concerns about guarantees While the commission granted the temporary certificate, it said it was concerned about the guarantees filed Jan. 3, because they are to DNR, not to the RCA,”and are for performance of the terms of the lease and are not evidence of the financial fitness of KKPL." The commission said it”may not be able to rely on them to assure completion of the pipeline" and plans to release an order addressing those issues.
But the commission said it may issue a temporary certificate pending the determination of an application for a certificate and these circumstances qualify for a temporary certificate because timely construction of the pipeline will facilitate provision of service to customers currently without service.
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