CINGSA mineral rights decision upheld

The Alaska Supreme Court has upheld a Superior Court decision affirming that the state of Alaska and Cook Inlet Region Inc. own the subsurface mineral rights for the Cook Inlet Natural Gas Storage Alaska facility on the south side of the city of Kenai. CINGSA operates the gas storage facility, which uses a depleted underground reservoir in the Cannery Loop gas field to warehouse gas for Southcentral gas and electricity utilities.

The city of Kenai, as owner of 576 acres of surface land over the storage facility, had claimed that it owns gas storage rights and is, therefore, entitled to payment for use of the land. The city argued that gas storage rights are different from the mineral rights associated with discovery and development of natural resources. After negotiations over the issue came to naught, CINGSA filed suit over the matter.

The Superior Court rejected the city’s argument and confirmed that the state and CIRI, and not the city, own the subsurface storage rights for the CINGSA facility. The Supreme Court has now upheld that ruling.

- ALAN BAILEY