Cook Inlet Natural Gas Supply
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 a clip of John Sims, President - ENSTAR, speaking at Governor Mike Dunleavy's press conference on January 6, 2025.
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.
