Enstar has new ConocoPhillips gas contract

Enstar Natural Gas Co., the main Southcentral Alaska gas utility, has a new gas purchase agreement with Cook Inlet gas producer ConocoPhillips. The new agreement, which covers the years 2016 and 2017, will enable Enstar to purchase a total of 4.75 billion cubic feet of gas. The gas will come from the ConocoPhillips-operated Beluga River and North Cook Inlet gas fields.

Enstar has filed a tariff advice with the Regulatory Commission of Alaska requesting commission approval of the purchase agreement. Gas prices under the agreement will be $7.27 per thousand cubic feet in 2016 and $7.57 in 2017. Those prices are a little less than price caps set for the sale of gas by Hilcorp Alaska, another Cook Inlet gas producer, under the terms of a consent decree agreed between Hilcorp and the State of Alaska following Hilcorp’s purchase of Chevron’s and Marathon Oil’s Cook Inlet gas fields.

The purchase agreement with ConocoPhillips will provide for 1.8 billion cubic feet of gas in 2016 and 2.9 billion cubic feet in 2017, relatively modest volumes in comparison to Enstar’s total predicted gas needs of 33.3 billion cubic feet and 34.9 billion cubic feet in those years. And, assuming that the Regulatory Commission of Alaska approves the new agreement, Enstar will still be left with 16.6 billion cubic feet of unmet needs in 2016 and 20.7 billion cubic feet of unmet needs in 2017. However, with Hilcorp having recently said that it anticipates being able to close the gap on Southcentral utility gas supplies through to 2018, there are presumably further new gas supply agreements in the offing.

—Alan Bailey