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Enstar reports growth in 2002

Issues with gas reserves won't go away -- even with new finds

Posted: Thursday, January 30, 2003

Enstar Natural Gas Co. has seen increased activity recently in the central Kenai Peninsula. But officials said there is a limit to what the company's reserves from the Cook Inlet region can produce if more discoveries aren't made.

Charlie Pierce, Enstar's peninsula regional manager, told the Kenai Chamber of Commerce on Wednesday that the company saw significant growth in 2002.

"Our crews had the busiest year we've had in a long time," Pierce said.

He said crews installed new services to 517 homes or businesses and the company generated 430 new customers, representing a growth rate of 4.5 percent. Crews also installed 21 miles of main line throughout the area, with 11 miles dedicated to the Tote Road and Echo Lake Road areas.

"It provides an opportunity for people who live on the fringes of our community to acquire natural gas," Pierce said.

He said work on the 33-mile Kenai Kachemak Pipeline, the cooperative project with Marathon Oil and Unocal, has begun. When completed, the line will deliver natural gas to southern peninsula communities.

"Yesterday (crews) performed the first welds on that line," Pierce said.

"Current plans for that line would serve the Kasilof area, and we have plans to expand to Ninilchik Anchor Point and Homer."

Enstar president Tony Izzo said there is a good chance service will be available to Homer by 2004.

Izzo said his visit to the chamber was not only to discuss Enstar's achievements, but also to make the audience aware that the future for Cook Inlet gas is finite.

"By the end of the next decade, even with substantial new discovery, there will still be issues with the amount of gas reserves," Izzo said.

He said the inlet's natural gas reserves most likely will be unable to meet the demand of the region unless two tons per cubic foot of reserves are added and industrial use is discontinued after 2009.

The latter option could hurt companies in the area dependent on gas for operations. Izzo said that isn't something he wants to see happen.

But he showed a 1998 report from the state Department of Natural Resources that said industry accounts for more than 60 percent of the natural gas consumption from Cook Inlet fields.

"I don't like seeing that Agrium will be cutting operations," he said. "I don't like talk of decertifying the LNG (liquefied natural gas) plant. Fewer jobs means fewer people paying for natural gas."

Izzo said he promotes natural gas exploration and would support a move to develop a storage field where natural gas reserves could be warehoused for a rainy day. He said now is a good time to seek this help from state and federal lawmakers. He said what he perceived as like- minded leadership in Juneau and in Washington, D.C., creates an opportunity to support building an in-state gas line to pipe any newly discovered gas from Cook Inlet, the North Slope and natural gas fields near Fairbanks.

"Since the recent state elections, I've heard it said that 'the stars are aligned,'" he said. "If we could get the state to support helping us with some type of storage project, it would buy us a few years. We have a common interest to be prepared whenever North Slope natural gas comes on line."

But he said it is important that all those concerned be of one accord when sending this message to state and federal legislators.

"We need all the players to speak with a unified voice after what we want," Izzo said.



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