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RCA opens docket to gather Cook Inlet LNG importing information
ALAN BAILEY
On Feb. 4 the Regulatory Commission of Alaska opened a docket to gather information about plans for implementing liquefied natural gas import terminals at Nikiski on the coast of the Kenai Peninsula. The LNG will be used by gas and electricity utilities to supplement gas supplies from Cook Inlet oil and gas fields, as Cook Inlet gas production declines. The purpose of the docket is to assemble the information that the RCA will need for determining future RCA actions regarding costs incurred by the utilities from LNG importing.
Harvest Midstream has an agreement with Anchorage based Chugach Electric Association to convert the existing LNG export facility at Nikiski into an import facility. The converted terminal will supply gas to Chugach Electric after the electric utility starts to run short of firm gas supplies from the Cook Inlet basin in 2028.
Enstar Natural Gas Co. has an agreement with Glenfarne, the company planning to build a gas pipeline from the North Slope, for Glenfarne to build a new LNG import facility at Nikiski. Glenfarne anticipates converting the LNG import facility into an export facility as part of phase two of the North Slope gasline project.
Timing issues Chugach Electric requires imported gas before the Glenfarne import facility can be completed. Hence the electric utility's need for the converted terminal. Enstar has indicated that the converted terminal will not have sufficient capacity to meet both Chugach Electric's and Enstar's gas supply needs. Hence, the need for the two terminals.
However, the implementation of two terminals at adjacent sites raises concerns about the impact of the duplication of facilities on the cost of the gas. Hence the RCA's interest in the matter.
The RCA does not have jurisdictional authority over decisions to develop duplicative facilities -- the Federal Energy Regulatory Commission has jurisdiction over LNG terminal construction. However, the RCA will ultimately have regulatory authority over the impact of the costs of using the facilities on the rates that the utilities want to charge their customers.
In this new docket the RCA can gather information about what is happening, to assess the prudence of the duplication of the facilities, the RCA indicated.
--ALAN BAILEY
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