Cook Inlet Natural Gas Supply
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.
