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Vol. 26, No.39 Week of September 26, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Furie signs new gas sales agreements

Contracts with Chugach Electric and IGU could enable additional gas supplies when convenient at some agreed price and volume

Alan Bailey

for Petroleum News

Furie Operating Co. has signed new gas supply agreements with Anchorage-based Chugach Electric Association and Interior Gas Utility in Fairbanks. Furie is wholly owned by HEX Cook Inlet LLC, the owner and operator of the Kitchen Lights gas field in Cook Inlet. Neither supply agreement commits to any specific volumes of gas to be delivered, nor to any gas pricing. The concept is to enable the purchase of gas from Furie at some agreed price and volume, should the opportunity arise. While the Chugach Electric supply agreement requires approval by the Regulatory Commission of Alaska, the IGU board approved the IGU gas supply contract during its Sept. 14 board meeting.

IGU general manager Dan Britton told the IGU board that the Furie contract could kick in if there is an opportunity to buy gas from Furie at a competitive price, to bolster IGUís liquefied natural gas inventory - IGU converts Cook Inlet gas to LNG and then stores the LNG in Fairbanks and North Pole, to source gas supplies delivered to customers through gas distribution pipelines. IGU has a gas supply contract with Hilcorp Alaska for firm supplies at agreed pricing, with options for additional gas, if necessary.

Economy energy sales

In an RCA filing, Chugach Electric told the commission that the primary purpose of its new Furie contract is to support power generation for economy energy sales to Fairbanks utility Golden Valley Electric Association, and to supplement existing gas supplies as necessary, to meet firm electricity system load requirements. Economy energy sales involve the sale of electricity at attractive prices from one utility to another, through the Railbelt electricity transmission network.

Chugach Electric and Furie have terminated a gas supply agreement that was signed in March 2017, Chugach Electric told the commission. That agreement provided for interruptible gas supplies through March 31, 2033, the end date of the contract, with firm supplies to begin on April 1, 2023. The utility said that, to make up for the firm gas supply in the terminated agreement, it has exercised a right to additional gas supplies from Hilcorp under the utilityís existing Hilcorp supply agreement. Chugach Electric has asked the RCA to approve the new Furie contract by Nov. 1 - the contract would end on March 31, 2023.

Furie supplies Kitchen Lights gas under contract to Anchorage based Enstar Natural Gas Co.



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