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Buccaneer sales contract with Enstar approved

Posted: September 28, 2011 - 9:50pm  |  Updated: September 29, 2011 - 9:00am

Buccaneer Energy announced Sunday that the Regulatory Commission of Alaska has approved its gas sales contract with Enstar for the natural gas well behind WalMart.

According to Buccaneer's announcement, the company will sell between 5 and 15 million cubic feet per day beginning in April, assuming the Cook Inlet Natural Gas Storage Alaska facility off Bridge Access Road in Kenai is done. That gas will be stored at the CINGSA facility throughout the summer, and taken back out of the ground in the winter when the demand for gas in Southcentral Alaska exceeds the supply. This winter, Buccaneer can sell gas on a non-firm basis, meaning that meaning that it will sell gas when Enstar is looking for extra. Those sales will begin once a pipeline to move gas from the first Kenai Loop gas well to market is finished, likely in December.

The regulatory commission made that decision Thursday. Gas sales contracts between Enstar and Aurora Gas and Cook Inlet Energy were also approved the same day. Those contracts are for gas sold on a non-firm basis, beginning at the end of this year. The contracts last through December 2012, with a provision that they can be extended for a year.

Enstar spokesman John Sims said earlier this month that the potential contracts with Buccaneer, Aurora Gas and Cook Inlet Energy would give Enstar a boost in meeting customers' natural gas needs this winter.

According to Buccaneer's announcement, this contract was the fastest contract approval in the commission's history. A number of legislators wrote letters of support to the regulatory commission for both gas sales contracts.

Enstar also recently filed with the regulatory commission to change its gas cost adjustment to include gas storage costs. That would allow it to adjust its rate to include the cost of storing gas at the CINGSA facility throughout the summer. A decision on that adjustment is expected to be made this month.

Formation drilling done

Buccaneer Energy recently announced that drilling on its second well in the Kenai Loop formation is done.

According to the company's announcement, analysis and additional work -- including well testing -- is still to be done. The drilling went down 11,000 vertical feet. So far, the work has identified four zones.

The company is still ahead of schedule for its contracts to explore and produce gas from its Kenai Loop wells.

Molly Dischner can be reached at

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crisppusa 10/20/11 - 07:14 pm
Cook Inlet Gas Storage - Possible Costs.

A quick check of the CINGSA deal shows....
everyone involved is connected via Semco [parent company of Enstar]
How is cost control excercised on a project when
the driller {Buccaneer} /developer MidAmerica/ & Enstar
are all interrelated. ( ie who's watching the chicken house)
Cingsa is tariffed out at $180 million..this based on pay off
by the Enstar customers. [ie the local consumer]
Concern : What happens if gas storage area - fractures
springs a leak -fails to hold gas.
Consequence: customers get stuck with having to purchase
short term gas..... and still get the bill to retire
the original $180million.
LongTerm: If this thing is a 'bust' we will have pumped
gas into pale full of holes.
Enstar's parent owners ...{Semco by way of Chicago} in
this last decade had T Izzo in charge. Izzo college credentials were questioned when he ran for Chugach Electric
Board in 2008. Izzo was originally sent to Alaska by Semco.

The Chicago connection....and Izzo question give one pause
to consider sophisticated Semco/Buccaneer & MidAmerica really are.

Question: is this $180 Million project that competitive bid
could do for $50 Million. What is the risk of
leakage in the inventory from this socalled gas
storage area?
Alaska Utility commission has granted the "tariff" and
apparently accepted the Semco numbers. { Who checked
the numbers.?}
Rate payers $180 million remorse is too late.
Was Utility Commission competent to check energying
and cost estimates... Most important this inter-locking
of all these companies does not lend itself to competitive

Just another Alaska Project that slides thru... to our
later regret. Why?

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