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Underground storage project on track for April natural gas injection

Posted: January 18, 2012 - 6:44pm  |  Updated: January 23, 2012 - 12:07am

The natural gas storage project under construction in Kenai is nearly operational, despite some remaining appeals.

The fifth and final well at the Cook Inlet Natural Gas Storage Alaska project was recently finished. The project is on track for natural gas injection to begin in April, said spokesperson John Sims.

“On schedule, under budget, the project’s going really well,” Sims said, adding “Knock on wood.”

Next, Sims said the drill rig working on the project will be disassembled. There’s also some work to be done finishing the facilities and preparing the wells before injection begins.

The storage project, located near the intersection of Beaver Loop Road and Bridge Access Road in Kenai, is a joint venture by Semco Energy and MidAmerican. Semco is the parent company of local natural gas supplier Enstar. The project’s customers include Enstar and local utility Homer Electric Association.

The project is a mostly-depleted natural gas field that will be injected with natural gas produced in the summer. The gas will be used in the winter, when the demand exceeds the supply coming out of the Cook Inlet.

Sims said about 8 billion cubic feet of natural gas will be injected into the field in summer 2012, and about 11 billion the summer after.

The project will have a capacity of about 11 billion cubic feet.

Gas withdrawls will likely begin in November 2012, Sims said, but that will depend on weather and the demand for gas next fall. Up to 150 million cubic feet can be withdrawn, and delivered to customers, each day, during the withdrawl period. 

The project required permits from several bodies, including the city of Kenai, and permission to land and subsurface rights.

The land has been acquired. Now, the company is working on a few valuation issues, Sims said. 

“We don’t expect there to be any issues,” he said.

There’s also two administrative agency appeals working through the court system over permits given to the project.

CINGSA and the city of Kenai are named as parties in one appeal filed with the Kenai Superior Court over the conditional use permits the city gave the project.

Kenai’s Planning and Zoning Commission gave CINGSA permits for its gas conditioning facility and injection pad in October 2010. Vincent Goddard appealed those permits, but the city’s Board of Adjustments upheld the permits in December 2010, although it added additional conditions.

Goddard then filed an appeal of those permits. He has two businesses, Wild Pacific Salmon Inc. and Inlet Fish Producers Inc., which are named as parties to the appeals. Collectively, they’re referred to as Inlet Entities.

Goddard’s appeal lists three major issues with the permits. One was procedural — that due process was violated when the city’s Board of Adjustment did not allow additional information to be added to the record on the night of its hearing. The other two related to a plugged well on Inlet Entities’ property, and the need for remediation for public safety, and property values, to be protected.

In briefs supporting their positions, CINGSA and the city explained the timeline that prevented the addition of the material, and the evidence they felt supported the permits. Another facet of the city’s argument is that the conditional use permits require all other necessary permits to be acquired, and hands over the responsibility for some technical decisions — like determining whether or not the project poses a safety risks — to bodies such as the Alaska Oil and Gas Conservation Commission. 

A response brief from Goddard is due in early February.

Goddard also filed an appeal over the project’s approval from the Alaska Oil and Gas Conservation Commission. CINGSA is an appellee in that case, as well. The next brief in that case is due March 1.

 

Molly Dischner can be reached at molly.dischner@peninsulaclarion.com.

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