State OKs plans for Kenai gas line spur

Posted: Sunday, December 01, 2002

ANCHORAGE (AP) -- The state has OK'd plans for a new Kenai Peninsula natural gas pipeline that will link reserves in Ninilchik to an existing pipe network to Anchorage.

Construction on the new $25 million spur could begin as soon as January, and be finished and operational by the end of October 2003. The state granted a 30-year right of way lease to a consortium behind the project.

The line will be able to handle three times more gas than it will initially carry, and officials hope it will boost development of new fields near Ninilchik.

Marathon Oil Co. owns 60 percent of the firm. A subsidiary of Unocal Corp. has a 40 percent stake. The project is being managed by Norstar, a subsidiary of Enstar Natural Gas Co.

The high-pressure tube will be built to handle 120 million cubic feet of gas a day. Initial estimates indicate the consortium will pump 30 million cubic feet of gas a day, leaving plenty of room if future fields are developed, said Bill Popp, oil and gas liaison for the Kenai Peninsula Borough.

''We think it opens new opportunities for development of new gas fields, which are very important to the future of the borough economy,'' Popp said.

Though this high-pressure line is strictly for transporting high volumes of gas from one place to another, its existence opens up the potential for residential gas delivery south of Soldotna fairly soon, officials say. People in this region typically heat their homes with fuel oil, propane and electricity.

There will be 12 taps along the line where special stations can be built to reduce the pressure for home use, said John Lau, transmission and operations manager for Enstar.

One spot, near Tustumena Elementary in Kasilof, may have enough population to make residential service profitable as soon as 2004, Lau said.

While delivering natural gas to Homer has been an on-again, off-again proposal in the last few years, there is still potential for a residential gas line running south from Ninilchik, Popp said.

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