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Gas storage facility heading to startup
Cook Inlet Natural Gas Storage Alaska, known as CINGSA, has told its customers that it plans to begin operations at its new natural gas storage facility on the Kenai Peninsula on April 1. Initial operations will consist of injecting gas into the facility’s underground reservoir in a depleted gas field on the south side of the City of Kenai. Southcentral Alaska gas and power utilities have said that without the new storage facility the aging gas fields in the Cook Inlet basin will be unlikely to be able to deliver gas fast enough to meet peak, cold-weather gas demand next winter.
The facility will provide gas storage services to third-party customers. And, in addition to supporting winter gas demand, the facility will enable customers to purchase and store gas during the summer, when utility gas demand is low but when gas producers are anxious to keep their gas wells in operation.
Initial customers CINGSA’s initial customers are Enstar Natural Gas Co., Municipal Light & Power and Chugach Electric. Homer Electric Association plans to start using the CINGSA facility in 2013. And in February CINGSA submitted to the Regulatory Commission of Alaska, or RCA, revised initial rates for the use of its facility, with those rates revised downwards from earlier estimates. The company said that the reduced rates reflect lower than expected capital costs for constructing the facility.
In a March 1 status report to RCA CINGSA said that two of the facility’s five wells had been tested and were ready for gas injection once connected to the facility’s gas gathering head. The other three wells were due to be tested shortly. Surface gas piping is being installed and the electrical power system has been commissioned.
CINGSA is still negotiating with some subsurface landowners over the terms of use of some of the land involved in the storage reservoir — the company has the right of eminent domain over private land needed by the facility. And, in response to a court order, the company is conducting a testing program to determine baseline levels of methane or other hydrocarbons in drinking water from water wells in the area.
Appeals There are two unresolved appeals in Superior Court against the CINGSA development. Both appeals are by Cook Inlet Entities, a group of companies headed by businessman Vincent Goddard. Goddard’s businesses operate on surface land above the storage facility and Goddard has expressed concern about the possibility of gas leakages from the facility. One of the appeals challenges the City of Kenai’s permits for CINGSA’s surface land use, while the other appeal is against the Alaska Oil and Gas Conservation Commission’s storage injection order. The Inlet Entities have requested an extended timeframe for the filing of briefs in both cases, with the cases now set to continue beyond the end of March.
And RCA is reviewing an application by Calgary-based AltaGas Ltd. to take a controlling interest in CINGSA. In February AltaGas announce that it was purchasing Semco Energy Inc., the company that owns Enstar and that co-owns CINGSA with MidAmerican LLC, First Alaska and Cook Inlet Region Inc.
—Alan Bailey
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