Donlin Gold mine a potential new Cook Inlet gas buyer

Though a proposed gold mine would be more than 200 miles from the Kenai Peninsula, it would affect the region as a new buyer in Cook Inlet’s natural gas market, which has suffered from relatively low and seasonal gas demand.

On Monday the parent companies of the Donlin Gold project — Barrick Gold Corporation and NovaGold Resources — announced that the Army Corps of Engineers had given it permits under the Clean Water Act and the Rivers and Harbors Act. In addition, the U.S. Bureau of Land Management offered leases of the federal land through which the companies plan to build a 316-mile underground natural gas pipeline that would deliver energy during the project’s 27-year planned life.

The mine, about 10 miles north of Crooked Creek village in the Kuskokwim River area, would be powered by a 227 megawatt-capacity power plant. The pipeline to fuel it would branch from Cook Inlet’s existing natural gas pipeline system north of Beluga on the inlet’s west side. It would take about 10.8 billion cubic feet of gas per year, according to its environmental impact statement.

“We don’t have a supplier lined up at the moment, but we’ve talked to various producers about supplying gas to us, so we’re pretty confident we’ll be able to secure what we need from Cook Inlet,” Donlin Gold spokesperson Kurt Parkan said.

Gas deals remain far in the future — Donlin Gold still has more permits to receive and engineering details to work out, Parkan said.

The mine would be a significant addition to the demand for Cook Inlet natural gas, potentially encouraging the region’s hydrocarbon extractors to invest in more exploration and drilling. Presently, the region’s top gas consumer is ENSTAR, which distributes about 33 billion cubic feet of gas per year to mostly residential and small commercial customers.

Because much of this gas is used for heating, ENSTAR’s need for gas is higher in the winter and lower in the summer, making its demand a moving target. In the past, a much greater demand came from large industrial gas users that used gas steadily throughout the year, evening out the peaks and valleys created by ENSTAR’s seasonal needs. These included the former ConocoPhillips liquefied natural gas terminal — which was permitted to export a total 40 billion cubic feet of gas during its final four-year U.S Department of Energy license — and the Agrium fertilizer plant — which consumed about 55 billion cubic feet per year before closing in 2007.

“When ENSTAR’s just a blip on the radar, it’s better for everyone,” Hobson said. “The seasonal fluctuations, we like to avoid those to the extent that we can.”

The mine proposal’s effect on gas prices remains speculative, Hobson said.

“If you get into a situation where there’s an increased demand, and so the producers restart some exploration or production activities, then perhaps in that event we might find ourselves in an oversupply if there’s a big find that could only happen when we’re looking for large quantities of gas to support Donlin, or any industrial customer,” Hobson said. “If we get into a situation of oversupply, we could reasonably expect to see lower gas prices.”

More in News

Seward City Clerk Kris Peck, right, administers an oath of office to Seward City Council newcomer Casie Warner during a council meeting in Seward, Alaska, on Oct. 28, 2024. (Screenshot courtesy City of Seward)
Seward City Council swears in winners of October municipal election

They were sworn in two weeks after the council certified its election results

Duane Bannock speaks to the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, June 18, 2024. (Jake Dye/Peninsula Clarion)
Borough’s tourism industry working group takes shape

The group will explore the effects of a potential bed tax

Assembly Member Peter Ribbens speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, June 18, 2024. (Jake Dye/Peninsula Clarion)
Ribbens, Cooper named new heads of borough assembly

The Kenai Peninsula Borough Assembly reorganized during their Oct. 22 meeting

A special weather statement for the western Kenai Peninsula was issued Monday by the National Weather Service. The area will see strong gusty winds and rain late tonight and through Tuesday morning. A winter storm warning remains in effect from 3 a.m. to 4 p.m. Tuesday for areas of the eastern peninsula. (Image via weather.gov)
Windy weather heads for western Kenai Peninsula

The western Kenai Peninsula will experience some windy and wet conditions Tuesday and Wednesday.

Lisa Gabriel, left, watches as beach seine nets are pulled from the waters of Cook Inlet at a test site for the gear near Kenai, Alaska, on Tuesday, July 30, 2024. (Jake Dye/Peninsula Clarion)
Board of Fish to consider set beach seines for east side setnet fishery

Seines were tested on local beaches this summer in effort helmed by Lisa and Brian Gabriel

Sockeye salmon are gathered together at a test site for selective harvest setnet gear in Kenai, Alaska, on Tuesday, July 25, 2023. (Jake Dye/Peninsula Clarion)
Board of Fish to consider expansion of commercial dipnetting fishery

Discussion of expanded time, days and season of commercial dipnet fishery scheduled for March

The Alaska Board of Fisheries hears public testimony at the Soldotna Regional Sports Complex in Soldotna, Alaska, on Feb. 18, 1999. (M. Scott Moon/Peninsula Clarion file)
Board of Fisheries again declines to hold Upper Cook Inlet meeting on Kenai Peninsula

The State Board of Fisheries this week rejected calls from the Kenai… Continue reading

U.S. Senator Lisa Murkowski takes a selfie with Rose Burke at the Kenai Municipal Airport in Kenai, Alaska, on Friday, Nov. 1, 2024. Burke won the 2024 U.S. Capitol Christmas Tree essay contest and will travel to Washington, D.C., in December to light the tree. (Jake Dye/Peninsula Clarion)
Connections student to light U.S. Capitol Christmas Tree

Rose Burke, 9, won the U.S. Capitol Christmas Tree essay contest and will travel to Washington D.C.

Most Read