Short-term gas contracts for Enstar

Amid continuing concerns about winter utility gas supplies in Southcentral Alaska, Enstar Natural Gas Co., the region’s main gas utility, has obtained two new short-term gas supply contracts, to bolster its firm gas supplies during the third quarter of 2013, according to a tariff advice that Enstar submitted to the Regulatory Commission of Alaska on May 15. The contracts guarantee 408 million cubic feet of gas at an average cost of $6.70 per thousand cubic feet, with some of that gas earmarked to go into storage for winter use, the tariff advice says.

The tariff advice indicates that Enstar now has enough gas under firm contract to meet its needs during the third quarter, but that the utility will likely have to withdraw 1.6 billion cubic feet from gas storage during the fourth quarter to meet high winter demand. The tariff advice also says that Enstar may seek additional short-term gas supply contracts. The utility also operates a daily bidding system to obtain short-term gas supplies, although prices under this system tend to be relatively high.

Enstar says that it does not require individual Regulatory Commission of Alaska approval for gas supply contracts with durations of less than one year.

John Sims, Enstar’s director of business development, told Petroleum News in a May 17 email that the two new short-term contracts are with gas producers Buccaneer Energy and Hilcorp Alaska.

“By addressing our 2013 needs immediately with these two contracts, Enstar can now focus on negotiating for mid- to long-term contracts,” Sims wrote.

—Alan Bailey