Saturday, April 21, 2012

Gas injections begin at new storage facility

Tim Bradner
Alaska Journal of Commerce

Natural gas is now being injected into a new gas storage facility on the Kenai Peninsula, Enstar Natural Gas says.

Five injection wells are now in operation at the Cook Inlet Natural Gas Storage Alaska facility on the Kenai Peninsula south of Anchorage, according to Enstar spokesman John Sims. Gas injection began April 1.

“We’re ramping up the injection to test the performance of the storage reservoir. So far we’re quite pleased,” Sims said.

Gas being injected now will provide pressurization for the reservoir, a depleted pool within the Cannery Loop gas field.

“Later we’ll start injecting gas for withdrawal later this year,” he said.

CINGSA is the first independent gas storage facility in Alaska, and the largest with 11 billion cubic feet of storage capacity. Cook Inlet gas producers own five other storage facilities, all smaller. The largest is at Marathon Oil’s Kenai gas field, which has a capacity of 6 billion cubic feet.

Injection will continue through the summer, with the first withdrawals planned for November and December, when there is peak demand for gas in Southcentral Alaska, said Sims.

Sims is also with Enstar Natural Gas Co., whose owner, SEMCO Energy, is one of the owners of CINGSA. The other owner is MidAmerican Energy Holdings.

New gas storage capacity is needed in Southcentral Alaska because daily gas production in producing fields in the region now falls below the daily peak demand in winter, and utilities like Enstar worry that gas storage capacity of the producers is insufficient to supply the utilities.

The new CINGSA facility will be able to withdraw gas at rates of 150 million cubic feet per day in the winter. Customers who will store gas include Enstar and two regional electric utilities, Chugach Electric Cooperative and Anchorage’s city-owned Municipal Light and Power.

The new facility has also cost less to construct than estimated, Sims said.

“We recently filed documents with the Regulatory Commission of Alaska indicating costs of $160 million, which is below the $180 million originally estimated. We’re quite pleased about that because it will mean lower costs for our customers for gas taken from storage,” Sims said.

This article appears in the AJOC April 22 2012 issue of Alaska Journal of Commerce

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