With customers on board and most of the subsurface rights acquired, the natural gas storage facility near Kenai is moving toward completion.
Cook Inlet Natural Gas Storage Alaska, a subsidiary of Enstar’s parent company Semco Energy, recently filed for regulatory approval of Firm Storage Service agreements with four customers. Enstar, Chugach Electric Association, Anchorage’s Municipal Light and Power and Alaska Electric and Energy Cooperative have each asked to inject natural gas into the depleted field in the summer, and withdraw it in the winter, when demand for gas exceeds the supply from producing fields.
CINGSA project manager Richard Gentges said it’s possible that additional customers will become part of the project later.
The contracts specify how much each customer would inject. Most begin in April 2012, with increases in the amount to be injected in the years that follow.
Alaska Electric and Energy Cooperative’s contract would begin in November 2013. That cooperative is a subsidiary of Homer Electric Association.
HEA representative Joe Gallagher said the association would use the storage space to help store fuel for its Independent Light project. Under that project, the association plans to produce its own power in 2014.
“We anticipate on withdrawing and injecting on a daily basis as needed,” Gallagher said in an email.
Gallagher said the association doesn’t know how the agreement to store natural gas will change its rates.
“There are many variables and that is still being studied,” Gallagher said.
The Regulatory Commission of Alaska is expected to make a decision on the agreements later this fall. Comments are due Sept. 29.
The facility itself is also nearing completion. A handful of oil and gas related companies are involved in preparing the site. Gentges said that work would likely be done by January.
The major work right now involves drilling the five wells where gas will eventually be injected and extracted, and building the offices, compressor building and auxiliary building that will support and power the operation.
The drillers reached the target depth — more than 5,000 feet underground — for the first well this week. Reaching that depth required about more than 8,500 feet of drilling because the well goes down and out to the side to reach the natural gas formation.
At peak construction, which Gentges expects to happen later this fall, about 130-140 people will be employed.
Once the facility is running, that number will drop. The first year CINGSA will have about five people working, though the storage setup is automated to the point that it can be run with just two or three people working a regular five-day work week.