Cook Inlet Gas Supply
2026 Gas Supply Update
Understanding Southcentral Alaska’s Natural Gas Supply
For more than 60 years, Southcentral Alaska has relied on natural gas from Cook Inlet to heat homes, power businesses, and generate much of the Railbelt's electricity. That supply has served Southcentral well for decades. Today, the energy landscape is changing, and the decisions being made now will shape Southcentral Alaska's energy future for decades to come.
Cook Inlet continues to produce natural gas. However, the remaining supply is becoming more difficult and expensive to develop, while demand for reliable energy remains strong. For ENSTAR, this isn't simply an industry discussion; it is a planning challenge that directly affects the more than 156,000 homes and businesses we serve every day.
Our Obligation to Serve
Unlike natural gas producers, ENSTAR does not produce natural gas from the Cook Inlet. We purchase natural gas from producers and safely deliver it to customers throughout Southcentral Alaska.
ENSTAR has a statutory obligation to provide continuous service without unreasonable interruption or delay. We must be proactive to secure additional gas supply sources to serve our customers.
Planning ahead is part of our responsibility to customers. While producers determine what gas they develop and sell, ENSTAR must secure reliable supply using the options available today while continuing to prepare for tomorrow.
“Utilities have an obligation to serve customers, something that is not shared by producers or any other entity.” - John Sims, ENSTAR President
Why Decisions Matter Now
Production from Cook Inlet has declined for many years. During the winter of 2025-2026, ENSTAR relied on natural gas storage more heavily than at any point in company history to help meet customer demand through an extended period of below-average temperatures.
At the same time, long-term local supply contracts are changing, and at this time, producers have indicated they are unable or unwilling to commit additional firm supplies needed to meet future demand. Large energy infrastructure takes years to develop.
The Bridge to Alaska's Future
The strongest identified long-term solution for Southcentral Alaska is a pipeline connecting North Slope gas to the Railbelt through the Alaska LNG Project.
To help protect reliability in the interim, ENSTAR has partnered with Glenfarne to develop a liquefied natural gas (LNG) receiving terminal on the Kenai Peninsula, with first deliveries targeted for 2029. The terminal is sized to meet regional demand, designed to minimize long-term costs if Alaska gas becomes available sooner than expected, and built to transition directly to North Slope gas through the Alaska LNG Project once complete. It is also designed to meet ENSTAR’s needs for the foreseeable future if needed.
The objective is to maintain reliable service today while preserving the opportunity to maximize Alaska's own natural gas resources tomorrow.
“We have to have the ability to look down the highway as opposed to the stop sign directly in front of us.” - John Sims, ENSTAR President
What ENSTAR Is Doing
Planning for Southcentral Alaska's energy future has been underway for several years. Since 2022, ENSTAR has focused on multiple strategies simultaneously to protect reliability, improve flexibility, and position Southcentral Alaska for the future.
- Expanding Natural Gas Storage: ENSTAR entered into an agreement with Cook Inlet Natural Gas Storage Alaska (CINGSA) for expanded gas storage capacity. In return, CINGSA invested $67 million to expand its storage facility by adding two billion cubic feet of storage capacity and related infrastructure. During the winter of 2025-2026, that expanded storage capacity helped maintain uninterrupted service throughout one of the coldest heating seasons on record. Additionally, we are in the process of developing more natural gas storage. Storage will be critical for bringing in LNG from other countries, or when we start receiving gas from the North Slope via the AK LNG project.
- Securing Additional Cook Inlet Supply: ENSTAR signed a five-year agreement with Furie Operating Alaska (now HEX Operating) to bring additional Cook Inlet gas into the system beginning in 2026. ENSTAR continues to buy every available molecule of natural gas from the Cook Inlet, as ENSTAR's priority remains maximizing Alaska's existing natural gas resources.
- Evaluated Every Available Option: ENSTAR invested $4.6 million in engineering studies, demand forecasts, and global requests for proposals to evaluate every practical long-term supply option. Those studies identified the same need and led us to our final conclusion: additional supply infrastructure is needed to help ensure reliable service beyond Cook Inlet's existing production.
The solution will require more infrastructure. Protecting Southcentral Alaska’s energy future requires multiple strategies working together, including local production, additional natural gas storage, LNG imports, conservation, and long-term pipeline development.
Why Alaska LNG Matters
Following years of engineering analysis, demand studies, and worldwide requests for proposals, ENSTAR determined that the Alaska LNG Project represents the strongest identified long-term opportunity to stabilize Southcentral Alaska's natural gas supply while maximizing Alaska's own resources.
No single project solves every challenge. However, Alaska LNG provides the greatest opportunity to reduce long-term dependence on imported LNG, improve energy reliability, and help stabilize future energy costs. Planning today's infrastructure so it can transition to Alaska LNG helps ensure investments made now continue providing value for decades.
What This Means for Customers
ENSTAR does not profit from the price of natural gas. Approximately 80 percent of a customer's bill reflects the cost ENSTAR pays to purchase gas.
As older Cook Inlet contracts expire and replacement supplies become more expensive, energy costs are expected to increase. Our responsibility is to minimize those increases while maintaining safe, reliable service for every customer we serve.
Energy conservation remains one of the most practical tools available today to help manage costs while Southcentral Alaska transitions to long-term supply solutions.
Looking Ahead
More than sixty years ago, many believed building a natural gas pipeline across Turnagain Arm was impossible. ENSTAR employees found a way.
Today's challenge is different, but the commitment is the same. The decisions being made today will shape Southcentral Alaska's energy future for decades. ENSTAR will continue planning, investing, and working alongside producers, utilities, regulators, policymakers, and community partners to ensure the families and businesses who rely on natural gas continue receiving safe, reliable service.
To learn more about Alaska’s energy future and explore additional research, visit energyforalaskans.com, a collaborative resource developed by Alaska’s utility community.
Updated July 8, 2026
2025 Gas Supply Update
On January 15, 2025, John Sims, ENSTAR President, presented a Cook Inlet gas supply update to the Regulatory Commission of Alaska. Below is a summary of his remarks.
ENSTAR is taking steps to ensure a reliable natural gas supply for the Railbelt Utilities. We’re working with Glenfarne Energy Transition, a leading global developer, owner, operator, and industrial manager of energy infrastructure assets, to create a natural gas receiving terminal on the Kenai Peninsula.
Here are highlights from ENSTAR’s presentation today to the Regulatory Commission of Alaska:
- Reliable natural gas for heating and power generation along the Railbelt.
- Efficient use of existing permitted project site.
- Scalable design to support future energy resource development.
Click here to view the presentation.
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On January 6, 2025, John Sims, ENSTAR President, provided a Cook Inlet gas supply update during Governor Mike Dunleavy’s news conference. Below is a summary of his remarks.
After Hilcorp announced in 2022 it would no longer extend contracts for gas supplies, ENSTAR began to evaluate options—on the ENSTAR system, and in collaboration with other utilities to ensure we could meet customers’ power and heating demands. Here’s what we’ve done since.
- ENSTAR, in collaboration with our partners at CIRI and Northern Natural, have spent $67 million to expand the Cook Inlet Natural Gas Storage Alaska (CINGSA) facility in Kenai—which was built in 2012 to ensure the utilities could store gas during the summer months, to withdraw during times of high demand. Last January, a couple of wells sanded in at that facility. This year, we allowed for two additional wells to be drilled. We did some additional facilities work, and also increased the capacity by 2 BCF to that critical infrastructure. We're almost complete with that facility upgrade, and expansion should be done in the next couple months.
- Our main priority is Cook Inlet gas. At the end of last year, we were able to submit a contract to the Regulatory Commission of Alaska for approval that we entered into for That's new gas coming onto the system that will start in 2026. It's a five-year contract. It will require a higher cost than in the past where, typically, it was in the $9 range. Depending on royalty relief, this is going to be between $12 and $13, so it is a jump, but that's what is required in the market today to make sure that we can keep our customers warm.
- The last thing that the utilities have been working on in collaboration with each other is to try to find some sort of bridge solution until we can get to that long-term solution that the governor has been talking about. We hired Berkeley Research Group right after that Hilcorp announcement in 2022. We gave a presentation to the Legislature and to the Regulatory Commission of Alaska about potential opportunities for projects that could help bridge that gap between the Cook Inlet and North Slope, or gas from some other location in Alaska.
- The first and main focus is Cook Inlet gas. The second was finding some sort of in-state solution, whether it's North Slope or in the Interior. And the third was importing LNG. For the last year, we've been really diving in and looking at different project proposals, different entities that are bringing those solutions to us and seeing which one makes the most sense for our customers.
- The first and main focus is Cook Inlet gas. The second was finding some sort of in-state solution, whether it's North Slope or in the Interior. And the third was importing LNG. For the last year, we've been really diving in and looking at different project proposals, different entities that are bringing those solutions to us and seeing which one makes the most sense for our customers.
- We have entered into an exclusivity agreement with a project developer to evaluate and continue down that path for a specific project that will potentially bring imported LNG as a bridge solution. It's critical we maintain flexibility to utilize Alaska resources. So as we go down this path, we're going to ensure that from a commercial perspective. We're still really early in the process, but we are very confident in the proposal that's been pitched, the entity we're partnering with, and what this can possibly provide for our customers in the future.
View John Sims, President - ENSTAR, speaking at Governor Mike Dunleavy's press conference on January 6, 2025 (minute 26:15).
ENSTAR is committed to providing reliable natural gas service to our customers. We recognize the importance of keeping you informed about the status of our gas supply and the measures we're taking to ensure your gas remains available without interruption.
ENSTAR's actions to secure long-term gas supply
- Securing new gas contracts: We signed a five-year supply agreement with Furie Operating Alaska to bolster local gas supply starting in 2026.
- Collaborative planning: ENSTAR is working with the Utility Working Group and the State of Alaska to explore long-term alternatives.
- Comprehensive studies: We’ve commissioned detailed reports to evaluate and secure future gas supply options.
What this means for you
We understand news about potential gas supply challenges is concerning. Currently, ENSTAR’s supply is stable, and your service remains unaffected. In the future, the question will not be whether we have gas, just where it comes from. We encourage energy conservation as a good practice and will continue updating you on developments. For the latest updates, please visit our website regularly, and follow us on social media.
Meeting your heating and power needs is our top priority. We will continue to take all necessary steps to ensure a reliable natural gas supply for our community.
2023 Gas Supply Update
As John Sims describes the results of the Phase 1 Assessment, “the work we are doing now represents a 'generational shift' in Cook Inlet’s energy landscape. Our goal is to ensure customers never worry about a gas shortage, and that we have a plan in place to meet these needs into the next generation. This confirms what we already know about Cook Inlet: this is an aging basin and we need a solution now in order to continue to serve our customers when ENSTAR’s contracts with Hilcorp expire in 2033. This assessment is centered on accessing reliable and timely gas delivery, not just for ENSTAR’s 150,000 customers, but for Railbelt electric utilities who rely on natural gas to generate electricity in Southcentral and the Interior."
Frequently Asked Questions
Q. What is the current status of natural gas in Cook Inlet?
In April of 2022 Hilcorp, Cook Inlet's largest natural gas producer, announced it did not have "line of sight" to produce gas beyond its existing contracts. This effectively put ENSTAR and local electric utilities on notice that it was time to look for an alternate supply of natural gas. While ENSTAR has much of its gas needs contracted with Hilcorp until 2033, electric utility contracts with Hilcorp begin to expire in 2028. All utilities will start seeing gaps in their gas supply portfolios beginning that same year.
Q. What is ENSTAR doing to help develop a long-term strategy for Cook Inlet gas supply?
ENSTAR is taking a proactive approach in communicating the challenges of securing a long-term natural gas supply for Southcentral Alaska, which is why you may have been hearing so much about this topic lately. Following Hilcorp’s announcement, the Railbelt utilities formed the Utility Working Group, with advisory support from the Department of Natural Resources and the Alaska Energy Authority. Through this group, ENSTAR commissioned Berkeley Research Group to identify and implement alternatives to replace declining Cook Inlet gas.
Q. Should I be worried about running out of gas?
No. The majority of ENSTAR's gas supply needs are met until 2033 and ENSTAR continues to engage and negotiate with Cook Inlet producers as part of a near-term solution. ENSTAR has sufficient time to implement alternative gas supply options.
Q. I'm building a new house, should I still install natural gas?
Natural gas remains the most efficient, affordable, and economic heating solution for Southcentral Alaska. Additionally, natural gas is used to generate more than 80% of electricity in Anchorage, Mat-Su, and the Kenai Peninsula. ENSTAR is committed to providing reliable energy service to Alaskans both in the near and long term.
Q. What can I do about this?
Practicing energy conservation is always a good idea. Simple things like keeping your gas appliances maintained and in peak performance and turning down the temperature on your hot water can make a big difference in the long run. Visit our Energy Conservation page for more ideas.
Q. How will this affect my bill?
While there are no immediate impacts to customers' bills, ENSTAR does anticipate gas costs to increase. Any changes to ENSTAR's fees and charges must be approved by the Regulatory Commission of Alaska. This includes the Gas Cost Adjustment which covers the cost of the gas you use.
