Hilcorp planning pipeline conference

Hilcorp Alaska LLC wants to consolidate four major Cook Inlet pipelines and it wants state regulators to oversee the potentially complex process starting early next year.

The dominant producer in the basin wants the Regulatory Commission of Alaska to oversee a settlement conference that is tentatively scheduled to begin on Jan. 7, 2014.

Hilcorp believes it would be “useful” for an RCA settlement judge to oversee the meetings, which would aim to balance the needs of Hilcorp and those of its customers.

Earlier this year, Hilcorp told the RCA that it was considering the possibility of merging its operations on the Cook Inlet Gas Gathering System, the Kenai Nikiski Pipeline, the Beluga Pipeline and the Kenai Kachemak Pipeline as a way to improve efficiency. The four pipelines work as a grid, but each is managed separately and has a separate tariff.

The consolidation would bring the four pipelines under a single management system, and would impose a single tariff and a postage-stamp rate for the entire grid of pipelines.

The idea of an RCA-led conference already has support from one familiar face.

Agrium U.S. Inc. plans to participate in any consolidation hearings, the global fertilizer company said in a recent letter to the RCA. “Agrium believes that such an RCA-sponsored settlement conference has the potential to result in a consensus among gas industry participants regarding rates and other tariff matters applicable to the proposed consolidated lines,” wrote Mike Palmer, a senior director on energy matters for Agrium.

Agrium mothballed its Kenai Peninsula fertilizer plant in 2008 after struggling to secure gas supplies from Cook Inlet. In recent years, the company has been fending off rumors about its intentions, including talk that it planned to ship the facility to Nigeria.

Agrium “has been engaged in extensive efforts assessing the reopening of its Nikiski Plant,” Palmer wrote. If Agrium decides to reopen the plant, the company would be “one of Cook Inlet’s largest, if not the largest, shipper and consumer of natural gas.”

—Eric Lidji