Enstar, Buccaneer sign new contract

Enstar Natural Gas Co. is asking the Regulatory Commission of Alaska for approval of a base gas supply contract with Buccaneer Alaska LLC with a fixed price arrangement.

Under the contract, Buccaneer would provide 2.663 billion cubic feet between Oct. 1, 2013 (or five business days after the RCA approves the contract, whichever comes first) and June 30, 2016, to be delivered at a “continuous rate.” Enstar would pay Buccaneer $6.80 per thousand cubic feet through 2013, with the price increasing 4 percent annually.

The price would be 20 cents higher than what Enstar will pay Hilcorp through a consent decree approved last November, but Enstar said this premium would be offset by a 30 cents savings in transportation rates for gas purchased under the Buccaneer contract.

The savings come because of the proximity of the Buccaneer-operated Kenai Loop field to existing Enstar pipelines in the region, which cuts down on shipping costs.

The contract also allows Buccaneer to sell any excess volumes to Enstar through the daily bidding system, a provision designed to help Enstar meet its daily needs during the planned spring and fall shut-ins at the Cook Inlet Natural Gas Storage Alaska facility.

The contract would be the third between Enstar and Buccaneer, although one is a short-term contract covering only the summer months and expiring this coming October.

The RCA is taking comments on the new contract through July 29.

—ERIC LIDJI