RCA asking for APE financial info

Pipeline operator wants owners’ financial records kept confidential for competitive purposes as it connects Nikolaevsk

Eric Lidji

For Petroleum News

Anchor Point Energy LLC is making another attempt to bring natural gas to a small Kenai Peninsula community after regulators deemed its original application incomplete.

The pipeline operator asked the Regulatory Commission of Alaska in early May to approve an interconnection agreement with Enstar Natural Gas Co. The agreement would allow the entities to use a state grant to deliver gas to the small village of Nikolaevsk.

The RCA denied the application because Anchor Point did not include information about the expected cost of the system and its projected rates, or financials for its owners.

Anchor Point is a subsidiary of Armstrong Oil & Gas Inc. and its partner companies at the nearby North Fork unit. The companies are all small independent explorers.

Working on behalf of those companies, Anchor Point currently operates only the North Fork Pipeline running from the North Fork field to the community of Anchor Point.

In resubmitting its Nikolaevsk application, Anchor Point said the interconnection would not impact the North Fork Pipeline in any meaningful way. Enstar would cover the costs and the interconnection would not impact rates because Anchor Point Energy operates the pipeline through a contract with Enstar and does not charge anyone a rate for service.

However, Anchor Point asked that its owners’ financial statements be kept confidential, saying the risk of the owner companies being “competitively or financially disadvantaged” if the records became public would “outweigh the public interest.”

When Anchor Point applied for its certificate of public convenience and necessity to operate the North Fork Pipeline, it originally asked to waive certain financial reporting requirements and ultimately got regulators to agree to keep the information confidential.

Anchor Point and Enstar signed the Nikolaevsk agreement on Feb. 27, 2012.

After the community received a $447,000 state grant last year, Enstar and Nikolaevsk entered into an agreement in July 2011 where the village would pay for a regulator station and a two-inch mainline running 8,930 feet to the Nikolaevsk Community School.

That kicked off an infrastructure build-out in the community. Enstar said it has installed nearly two miles of distribution pipelines through the community through October 2011.

While the school is expected to be the largest customer, Enstar expects the initial build out to also include the community fire station and 12 homes. Enstar could potentially extend the line 1,700 feet to connect a community church and nine additional homes.

Nikolaevsk is home to some 308 people, according to the most recent state estimates.

By approving the agreement “at its earliest convenience,” the RCA would give the community enough time to convert its heating systems to natural gas before winter.

The Kenai Peninsula Borough School District and the Anchor Point Fire & EMS Service Area asked the RCA to expedite its review in order to speed up the conversion process.

The RCA added Nikolaevsk to the Enstar service area in 1997.

With the development of North Fork and a series of grants from the Alaska Legislature, the businesses, residents and public buildings of the southern Kenai Peninsula are gradually getting the benefits of natural gas enjoyed by the rest of Southcentral.

In addition to Nikolaevsk, the coastal community of Anchor Point is converting some structures to burn gas. Meanwhile, the regional hub of Homer and nearby Kachemak City are studying and implementing financing plans to build out their distribution grids.