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CINGSA officially opens its gates Owners of Kenai Peninsula gas storage facility commission the plant; flow of gas into underground reservoir began on April 1 Alan Bailey Petroleum News
The May 31 official commissioning of Cook Inlet Natural Gas Storage Alaska’s new gas storage facility on the south side of the City of Kenai marks something of a new era in the Southcentral Alaska gas industry, with power and gas utilities now able to make their own gas storage arrangements to manage the swings in gas demand between summer and winter.
Representatives from the facility owners — Semco Energy, MidAmerican Energy Holdings Co., Cook Inlet Region Inc. and First Alaska Capital Partners — attended the commissioning ceremony.
The facility is designed to hold up to 11 billion cubic feet of working gas in a depleted reservoir that had been part of the Cannery Loop gas field.
Started April 1 Gas actually started flowing into the facility on a limited basis on April 1, John Sims, spokesman for Cook Inlet Natural Gas Storage Alaska, or CINGSA, told Petroleum News May 30.
The facility is currently injecting 45 million to 50 million cubic feet of gas per day into the reservoir, as the facility works up to a rate of 150 million cubic feet per day, Sims said.
“CINGSA provides the stability of both short and long term natural gas deliverability,” Sims said. “The facility will play a key role in future gas supply contracts for local utilities, helping ensure customers in Southcentral Alaska have natural gas when needed, throughout the year.”
The CINGSA facility was not only completed within a fast-track schedule but it was also constructed at a lower than expected cost.
“CINGSA’s original projected capital costs were $180 million. The project is expected to cost approximately $161.4 million after being re-forecasted as of Jan. 1, 2012,” Sims said.
The cost savings represent a potential 14 percent reduction in the rates that CINGSA will charge its customers, he said.
Remaining issues With a right of eminent domain over subsurface land required for the storage facility, CINGSA has now reached deals for land usage with all but a handful of landowners. A hearing to adjudicate any remaining land acquisition issues will be held in the third quarter of this year, Sims said. There are also two as-yet unresolved court cases over the facility, both raised by Cook Inlet Entities, a group of companies headed by businessman Vincent Goddard. Goddard has expressed concern about the possibility of gas leakages from the facility.
The Regulatory Commission of Alaska has also yet to approve Calgary-based AltaGas Ltd.’s proposed controlling interest in CINGSA — in February AltaGas said that it was purchasing Semco Holding Corp., the company that is part owner of CINGSA as well as being owner of Southcentral gas utility Enstar Natural Gas Co. RCA conducted a hearing in this matter on May 30, with CINGSA and Enstar asking for approval of the AltaGas deal by Aug. 30, Sims said.
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