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ENSTAR Seeks Supply While LNG Export Extension is Pending

February 13, 2007
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Cook Inlet, AK, producers and others have until March 19 to respond to a request for proposal (RFP) for gas supplies from Alaska Pipeline Co. and ENSTAR Natural Gas Co. The companies have supplies termed up through 2008 but will need additional supply beginning in 2009.

In May 2005 ENSTAR, which serves about 327,000 customers, warned that it may have to begin importing liquefied natural gas (LNG) to meet demand due to declining output from the Cook Inlet gas fields (see Daily GPI, May 23, 2005). In January, Marathon Oil Corp. and ConocoPhillips, two of the producers operating in Cook Inlet, jointly filed with the U.S. DOE for a two-year extension of the export license for the Kenai LNG terminal in Nikiski, AK, the only LNG export plant in North America (see Daily GPI, Jan. 22).

Kenai's current export license ends March 31, 2008, and the application is for an extension through March 31, 2011.

ENSTAR acknowledges that it is competing for gas supply with the export terminal but has not made a formal statement of its position on the license extension application. "ENSTAR is engaged with the Cook Inlet producers through a gas supply RFP process to obtain the long-term gas commitments," ENSTAR spokesman Curtis Thayer told NGI. He said the company would take a formal position on the license extension before the end of the application comment period.

In the meantime, ENSTAR said in its RFP, issued Feb. 1, that it is "interested in entering into one or more new, long-term gas supply contracts to meet needs well into the future. We are very flexible and would consider a single contract or contracts with several suppliers. We are also open to shorter term arrangements and to proposals that use storage, exploration, importation of LNG, or any other method of meeting our volume and deliverability needs. Although our contracts have traditionally had indexed pricing, we are open to fixed price contracts, or contracts with a combination of fixed and variable pricing."

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