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Gas storage facility progressing

Posted: Thursday, April 07, 2011

According to a monthly progress report from Cook Inlet Natural Gas Storage Alaska, a proposed gas storage facility in Kenai is moving forward -- but not without road blocks.

Photo By M. Scott Moon
Photo By M. Scott Moon
A crew from Foster Construction works Wednesday afternoon on the gravel pad that will hold the Cook Inlet Natural Gas Storage Alaska's facility at the corner of Bridge Access Road and Beaver Loop. A similar pad that will hold drilling equipment is under way across Bridge Access Road.

CINGSA, which is subsidiary of natural gas supplier Enstar's parent company Semco Energy, has said it is still on track to store gas in April 2012.

Work at the ground entry point in Kenai began in early March, with about half of the well pad excavation and backfill work finished that month. The company has also purchased a variety of project components, including the storage vessels, pipes and other components.

Enstar spokesman John Sims said the company is hoping to finish a majority of the site prep this spring.

"A majority of the engineering and permitting has been done," Sims said.

Now CINGSA is working on bids for the more technical parts of the project, and weighing its options on drilling support services, the report said. Those services are essentially assembly and parts for each of the five planned wells. More minor drilling issues, like tool rentals, have already been finalized, the report said.

But there is litigation remaining before the company can finish construction -- or start storing gas.

Property rights and permitting have sent the company -- and opponents of the project -- to court.

About 90 percent of the property interests needed to carry out the project are held by Cook Inlet Region Inc., Marathon Oil and the state of Alaska. The company's report said it is finalizing agreements with those entities and doesn't expect any hitches. But the remainder are held by a variety of individuals and companies. Sims said that the majority of the private individuals and entities have reached an agreement with CINGSA.

In March, CINGSA filed condemnation action against 35 parties that the company has not reached an agreement with to get access to the land or subsurface rights.

Of the permits already acquired, two were questioned by Inlet Entities and have made it to superior court. Those are the city of Kenai's conditional use permit and the company's storage injection order from the Alaska Oil and Gas Conservation Commission. That department has already denied one appeal of its permissions by Inlet Entities, as has the Regulatory Commission of Alaska.

The company also has some permits still needed. Although the major of the few dozen required permits have been acquired, some -- like the city of Kenai's conditional use permit -- are contingent on all of the others being granted.

Before construction begins in earnest, the company will have to apply for a variety of permits from the city of Kenai for building, well drilling, water and sewer, excavation and other aspects of the project. Those are scheduled to be submitted this spring. Water and sewer plan approval, and authorization for temporary storage of drilling, are also required. Those come from the Division of Environmental Health, and will be submitted this spring, the report said.

To start drilling farther down the road, the company must also get permits from the oil and gas commission. Those will be submitted in May or June of this year.

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



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