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Enstar teams with TransCanada to store natural gas in Alaska

by Megan Baldino
Wednesday, October 21, 2009

ANCHORAGE, Alaska -- Enstar Natural Gas Company says it's working to help solve Southcentral Alaska's seasonal shortage of natural gas.

Company officials confirmed Wednesday that they are working on a project with TransCanada subsidiary ANR Storage Company to build a natural gas storage operation in Southcentral.

Rick Gentes, the director of reservoir services for ANR says this would be a first for his company, the world's third-largest storage operator.

"We have not constructed storage in Alaska before, so it's a new environment for us and there is no third party storage in Alaska, so from what we understand, it will potentially involve a new regulatory process of sorts," said Gentes on his cell phone from Michigan.

Gentes says ANR would convert a depleted natural gas reservoir in the area into a storage reservoir, "and that injection process takes place typically over the summer months, and in essence we are filling the depleted fields back up with gas so come wintertime when the demand is much higher we can then withdraw the gas back out of storage and deliver it to market."

Gentes and John Sims with Enstar did want to go into too much detail about the project, saying they are still in the early phases of the research. That means it's not clear what the cost would be or how it would be passed onto consumers. Also not clear, what producers ANR is talking to.

"It can be a challenge, but at some point when a producing field reaches the end of its economic life they have no value to the producer, so it winds up being a process working with them to see what plans they have for a field," said Gentes.

If local utilities could potentially tap the gas in storage during peak usage, it could go a long way to helping solve Southcentral's shortage issue, Sims said.

Jim Posey with Municipal Light and Power did not want to comment until he sees a plan, but he did say storage is needed.

Bill Popp with the Anchorage Economic Development Corporation said a storage facility is an important step forward for Cook Inlet.

"It's very good economics, because we want to see a very steady supply of energy, and again our challenge is that in the summer demand is really low and in the wintertime it's really high, so this allows us to balance the amount of gas we can have available in wintertime by putting it into storage in the summertime," said Popp.

As for the regulatory process, state Sen. Lesil McGuire, the chair of the Senate Energy and Resources Committee, says the issue of a storage facility will be a top priority for lawmakers in Juneau in January.

"We think it's going to involve a comprehensive package that comes about via Alaska statute along with RCA work to be done jointly. Again, it's the first of its kind, but we'll have other jurisdiction to look to and it will be one of the top priorities," said McGuire.

Enstar and TransCanada still need to get approval of the project from their management teams and boards. That could happen in late November or December.

Contact Megan Baldino at mbaldino@ktuu.com