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CINGSA files gas storage agreements Seeks RCA approval for agreements with Enstar, ML&P, Chugach Electric and Homer Electric for use of new gas storage facility Alan Bailey Petroleum News
Cook Inlet Natural Gas Storage Alaska has filed with the Regulatory Commission of Alaska proposed gas storage service agreements with the company’s four initial customers for its gas storage facility on the Kenai Peninsula. Those customers consist of Southcentral Alaska utilities Enstar Natural Gas Co., Chugach Electric Association, Municipal Light & Power and Homer Electric Association. CINGSA is fast tracking development of its new facility, the first storage facility in Alaska to offer storage services to third party customers, to head off a pending shortfall in utility gas deliverability during the winter of 2012-13.
Enstar Enstar, the main Southcentral Alaska gas utility, with an especially urgent need for gas storage to ensure the maintenance of gas pressure in its distribution system during peak winter gas demand, is CINGSA’s largest customer. Enstar’s service agreement involves the booking of 5 billion cubic feet of storage capacity when the CINGSA facility goes into operation, maximum daily gas injection rates ranging from 56 million cubic feet to 113 million cubic feet per day, and maximum withdrawal rates ranging from 50 million cubic feet to 91 million cubic feet per day. The booked storage capacity would increase in steps to 8.7 billion cubic feet from April 2017. The entire agreement runs through to March 2032.
Enstar has also filed for RCA approval of a tariff modification that would enable the utility to recover from its customers the cost of gas storage usage.
Power utilities Chugach Electric has booked 2.4 billion cubic feet of storage capacity, with maximum injection rates ranging from 13 million to 27 million cubic feet per day, and maximum withdrawal rates from 19 million to 35 million cubic feet per day. Booked capacity would drop in steps to 1.6 bcf from April 2017.
ML&P has booked 0.6 bcf of storage capacity, dropping to 0.5 bcf from April 2014, with injection rates ranging from 5 million to 10 million cubic feet per day, and withdrawal rates ranging from 5.6 million to 10 million cubic feet per day. Homer Electric does not plan to use the facility until November 2013, at which point the utility wants 125 million cubic feet of storage capacity, injection rates from 3 million to 6 million cubic feet per day and similar withdrawal rates.
Gas for Homer Electric On Aug. 29 Homer Electric announced that it had signed an agreement with Chevron subsidiary Unocal for the supply of 4 bcf to 4.5 bcf per day of natural gas, starting in January 2014, in anticipation of Homer Electric operating its own gas-fired power generation after its current power purchase agreement with Chugach Electric expires on Dec. 31, 2013. Homer Electric has yet to file the new gas supply agreement with RCA and has not provided information about the gas pricing.
In January CINGSA filed a proposed schedule of fees for the use of its storage facility, but before the facility goes into operation the company will review those fees in the light of factors such as facility construction costs and financing terms.
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