Monday, October 31, 2011

Natural gas prices will be down in in 2012

Tim Bradner
Alaska Journal of Commerce 

Here’s good news for Southcentral Alaska consumers: Enstar Natural Gas Co. will file a gas cost adjustment with the Regulatory Commission of Alaska later this week for the first quarter of 2012 that will be 37 cents per thousand cubic feet, or mcf, lower than the gas cost filed a year ago for first quarter 2011.

Enstar President Colleen Starring made the announcement at the Anchorage Chamber of Commerce “Make it Monday” luncheon meeting on Monday.

Because there will be no change to Enstar’s administrative or other expenses, it means heating costs for Enstar’s customers will be lower for the first part of the year than last year.

Despite declining gas reserves in Southcentral Alaska, Enstar’s gas prices have been trending downward slowly, and Starring credited that to new gas producers appearing on the scene, mainly small independents, who are exploring for and finding new gas supplies.

State exploration incentives approved by the Legislature have caused an upsurge in drilling in Southcentral Alaska, Starring said.

The lower price is also an effect of a pricing formula for one of Enstar’s major suppliers, Unocal Corp., that is linked to the Henry Hub gas trading index in Louisiana, where natural gas prices are at very low levels.

Enstar’s average gas cost was $6.75 per mcf in 2011, down from $6.99 per mcf in 2010.