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Enstar contracting additional Furie gas
Anchorage based gas utility needs extra contracted gas to fill pending shortfall in its gas supplies from the Cook Inlet basin
Alan Bailey for Petroleum News
Enstar Natural Gas Co., the gas utility for Southcentral Alaska, has filed a tariff advice with the Regulatory Commission of Alaska, asking for approval of a contract for increased gas supplies from Furie Operating Alaska. The gas utility is doing this as part of its efforts to fill future gaps in its gas supply needs, given pending declines in contracted volumes of firm supplies.
Furie, the operator of the Kitchen Lights gas field offshore in the Cook Inlet, is wholly owned by HEX Cook Inlet.
Closing the gas supply shortfall The amended contract under the tariff advice involves the firm provision of about 32 billion cubic feet of gas to Enstar between April 1, 2026, and March 31, 2031. Enstar says that this volume of gas would close its remaining shortfall in gas supply requirements during that period, and in particular would enable the continuance of Enstar's gas supplies to Alaska Electric and Energy Cooperative LLC. AEEC generates power for Homer Electric Association on the Kenai Peninsula. Enstar took over the supply of gas to AEEC in March of this year, after the termination of AEEC's firm gas supply contract with Hilcorp Alaska, the dominant Cook Inlet gas supplier. However, Enstar did not have sufficient future firm gas supplies to contract with AEEC for more than a year.
Enstar said that it is negotiating with producers and other parties to find ways to fill a remaining gas supply gap of 6 billion to 7 billion cubic feet during 2025 and 2026, before the amended Furie contract comes into play.
Contingent on drilling and production program However, in its RCA filing Enstar cautions that the increased gas supply from Furie is contingent on the successful execution of Furie's upcoming drilling and production program.
"Furie's commitment to deliver this gas comes with a significant execution and performance risk and the delivery of this volume is contingent on the actual drilling and production program," Enstar told the commission.
To meet obligations under the amended gas supply contract with Furie "Furie is committed to commence a multi-year development program drilling several new wells and reworking the existing wells in the Kitchen Lights Unit," Enstar told the commission.
And the development program is dependent on the execution of certain critical steps, including financing from the Alaska Industrial Development and Export Authority or some other funding source and the availability of a jack-up rig for offshore drilling. Currently the only jack-up rig in the Inlet is Hilcorp's Enterprise 151 rig. Although Furie has been able to hire Hilcorp's rig for some drilling, the availability of the rig depends on the extent to which Hilcorp is using the rig for its own Cook Inlet offshore work. The alternative would be to bring a second jack-up rig to the inlet under contract.
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