MEA secures gas contract with Hilcorp

Matanuska Electric Association, or MEA, has signed an agreement with Hilcorp Alaska for the supply of natural gas through to March 2018 for the new gas-fired power station that MEA is building at Eklutna, north of Anchorage, Joe Griffith, general manager of MEA, told the Regulatory Commission of Alaska on Aug. 14 during a commission public meeting. Griffith said that he anticipates filing the new agreement with the commission on Aug. 16. Meantime, no details of the agreement are publicly available.

MEA’s new power station is slated to go online in 2015, when the utility will start to generate its own power rather than purchasing power from Anchorage-based utility Chugach Electric Association, as at present. But MEA had been experiencing considerable difficulty in securing gas supplies — all Southcentral gas and power utilities have been struggling to meet their future gas needs as gas production declines from aging Cook Inlet gas fields.

The utilities had been considering importing liquefied natural gas into Southcentral Alaska in a couple of years or so to supplement local gas supplies. But Hilcorp, a relative newcomer to the Cook Inlet basin, has been aggressively pursuing a development program in gas and oil fields it purchased from Chevron and from Marathon Oil Co., and has indicated that it now has enough gas behind pipe to meet local utility needs through to 2018. In July Chugach Electric Association and Enstar Natural Gas Co., the main Southcentral gas utility, signed gas supply agreements with Hilcorp that would ensure that those utilities also have sufficient gas to meet their needs through to March 2018. RCA has yet to approve these agreements.

Petroleum News understands that the utilities are still considering the liquefied natural gas import option as a contingency arrangement, in case of gas supply shortfalls from 2018 onwards.

—Alan Bailey