Enstar eyeing imports

Bringing in LNG may avert shortfall

Posted: Tuesday, May 17, 2005

At an Alaska Natural Gas Development Authority board meeting Monday, Enstar president Tony Izzo said importing liquefied natural gas may be a solution to dealing with projected shortages of gas in Southcentral Alaska.

"Where we see things going, that's an option," Izzo said.

In an interview, Enstar spokesperson Curtis Thayer said that is one of the reasons the company has been so active in Juneau and in communities trying to heighten awareness of the need for a North Slope gas line.

Enstar is a company that delivers natural gas to about 327,000 Alaskans. This company relies on contracts from gas producers to supply it with gas for its customers.

Enstar will be able to purchase enough natural gas to supply all of its customers through 2009. After that, there is a gap, and they will need to find other sources of gas.

Izzo said his company needs to look at all ways to ensure there is enough gas to deliver to Southcentral Alaska. Enstar has been looking at a variety of ways to bring large quantities of natural gas to the region, he said.

Thayer said if they do import LNG, it would hopefully be a temporary solution until larger quantities of Alaska natural gas could be delivered to the region. Enstar assumes that imported LNG would come from foreign sources, he said.

LNG is natural gas put into a liquid so it can be exported. A North Kenai LNG plant jointly owned by ConocoPhillips and Marathon was built in 1969 because of cheap and abundant supplies of natural gas in the region. According to ConocoPhillips, it is the only export facility for LNG in North America.

Since that first plant was built, LNG operations have sprung up around the world and markets for it have increased. But the North Kenai plant is in danger of closing.

A federal export license required for operation expires in 2009. To renew the license, the owners need to find new natural gas supplies to fuel the plant.

ConocoPhillips officials say they want to continue to run the plant and are keeping their options open.

Although no formal negotiations have taken place between Enstar and ConocoPhillips, Thayer said if they did import LNG and the North Kenai plant closes, they could use that facility to store the imported product.

"We would rather develop our own natural gas resources," Thayer said. "We would rather see an in-state natural gas line from the North Slope."

Thayer said Enstar has worked with ANGDA, a state corporation, on a plan to build a spur gas pipeline from Glennallen to Palmer that would deliver North Slope gas to Southcentral Alaska. If built, this pipeline would spur off of a proposed larger pipeline to Valdez, he said.

Thayer said there is an alternate route for a pipeline that could go from Fairbanks to Anchorage down the parks highway. This could deliver large quantities of gas that are suspected to be in the Nenana basin as well as North Slope gas, he said.

Gas in the Nenana basin has not yet been proven.

In an interview, Bill Popp, oil gas an mining liaison for the Kenai Peninsula Borough, said the borough administration does not see any of ANGDA's proposals as being in competition with other projects to build a pipeline to Valdez, the Lower 48, or a pipeline from the Nenana basin.

"We encourage both ANGDA and Enstar to continue the work they're doing," Popp said.

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