Backers of a planned natural gas storage facility to serve Alaska's gas-short Southcentral region plan to begin some work on the project in October or November, they told the Regulatory Commission of Alaska (RCA) in a filing.

Cook Inlet Natural Gas Storage Alaska LLC (CINGSA), which is a venture of Semco Energy Inc. and MidAmerican Energy Holdings Co., said, "Process and mechanical designs for the surface facilities for gas injection and withdrawal facilities have been completed. The technical specifications for the engine-compressor units and nine major equipment items associated with gas injection have been prepared."

CINGSA intends to convert a depleted reservoir in the Kenai Peninsula Borough for storage utilizing five injection/withdrawal wells and two compressors. Customers of the facility -- Semco's Enstar Natural Gas utility, Chugach Electric Association and Anchorage Municipal Light and Power -- will provide gas for injection into storage from various sources in the Cook Inlet region via the Kenai Nikiski Pipeline.

"Working gas will generally be injected into the proposed storage facility during the summer months when available supply exceeds demand," CINGSA said in an earlier filing. "The proposed gas storage facility will have an initial working gas storage capacity of 11 Bcf and has been designed so that additional compression, separation, dehydration, measurement, and storage injection/withdrawal wells can be accommodated, if expansion of the facility is warranted."

Storage injections are expected to begin in 2012.

"CINGSA is an important ingredient for assuring that Enstar Natural Gas Co. and Cook Inlet electric utilities are able to meet the needs of their customers, especially during times when the demand for gas and electricity generation using gas is high each winter," said Semco CEO George Schreiber in July at the time of the project's initial filing with the RCA.

The project is slated to cost about $180 million and is said to be needed because the ability to deliver gas to customers when they need it has dramatically declined as Cook Inlet gas fields have aged. Enstar and other area utilities have had difficulty securing gas supplies in recent years and have been forced to consider conservation measures (see Daily GPI, Sept. 3, 2009).

Enstar is to utilize 70% of the initial storage capacity; Chugach Electric Association and Anchorage Municipal Light & Power together will subscribe for the remaining 30%.

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