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RCA OKs Fairbanks Natural Gas contract
The Regulatory Commission of Alaska has approved a special contract for gas sales and transportation service between Enstar Natural Gas Co. and Fairbanks Natural Gas Co. LLC, effective Oct. 1, forestalling loss of gas for some 800 residential, commercial and institutional customers in Fairbanks.
The commission said in a Sept. 29 statement that Fairbanks Natural Gas filed an emergency complaint after its current gas supplier said it would no longer provide natural gas beginning Oct. 1. FNG liquefies gas on the west side of Cook Inlet and trucks it to Fairbanks where it has some 800 residential, commercial and institutional customers.
Enstar has been providing gas transportation for FNG to the liquefaction plant and on Sept. 26 requested approval of a special contract covering gas sales to FNG beginning Oct. 1. Dan Dieckgraeff, Enstar’s regulatory and gas supply manager, said at a Sept. 27 hearing that the contract has a limited term because FNG is “trying to develop a new facility on the North Slope and … that’s where their supply would come from. They indicated that they thought they might be able to have that up and running before next winter.” He said the agreement is through the mid-summer of 2008, but FNG can cancel earlier if it gets the North Slope facility up and running sooner.
Immediate issue is gas for this winter The immediate issue is gas for the upcoming winter of 2006-07.
Dieckgraeff said Enstar found out Sept. 19 that Fairbanks Natural Gas was unable to buy gas from any of the Cook Inlet producers. He said Enstar did not contract with FNG because it felt it was obligated to do so. “We have done this because we feel that we can’t watch people freeze and so we’re going to do our best to try to make the best out of a bad situation for those people.”
Enstar initially said, in response to an emergency complaint filed by FNG Sept. 19, that FNG was only a transportation customer and it had no obligation to provide gas.
As to why FNG turned to Enstar for gas, FNG President Dan Britton said other contracts FNG was offered were for interruptable service and FNG needed “a firm supply of gas as our supplies to our customers are on a firm basis for the most part.” Britton said it was at the end of May that FNG first learned that “long-term supply was uncertain” from FNG’s contract with Aurora Power.
—Kristen Nelson
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