New Natural Gas Development Coming at a Critical Time
Cook Inlet is rich with a resource that lies beneath its ocean floor: natural gas.
Alaska Oil and Gas Association officials say in recent years, development in the area was low but the tides are changing due to corporations like Hilcorp, Cook Inlet Energy, Apache and Furie.
Damon Kade, the president of Furie Operating Alaska, says the Kitchen Lights Unit has been looked at by other companies in the past but they were in search of oil, not gas.
"They were going for deeper targets,” Kade said. “Bypassing the gas because the gas was in abundance in the past. Now the tables have turned."
Furie Operating Alaska plans to harvest natural gas from Kitchen Lights Unit number 3. It's in the final stages of permitting and plans to begin work by the end of May.
Kara Moriarty, president of AOGA, says tax incentives and credits are not only bringing new names to the inlet but also smaller companies.
"It's a bigger portion of their portfolio because they have a smaller portfolio," Moriarty said. "We know the oil and gas is there and we just have to have the right environment."
For Furie, work will begin by bringing a custom built, 16,000-ton platform to Alaska. It's being assembled in Texas and will take 50 days by barge to arrive in Nikiski.
"It’s specific for the cook inlet,” Kade said. “It's not a design that would be used anywhere else in the world.”
A natural gas processing plant onshore will also need to be completed. So will a deal with local natural gas provider, Enstar. Negotiations are currently underway according to both companies.
“The benefit of getting all our gas from the Cook Inlet is the proximity to our pipelines,” said John Sims, director of development for Enstar.
Enstar provides natural gas for 136,000 customers in the South Central according to Sims. He says currently the supply needs are being met but soon a number of contracts are set to expire.
"Starting in 2018 we start to have our concerns and start to see some gaps there," Sims said. "So we are very anxious to see what happens in Cook Inlet as far as the new producers that are out there, and hopefully they're successful in their mission."
Furie says the Kitchen Lights Unit could supply natural gas for 20 years. The public input period ended Friday March 28, for the permits Furie needs from the Department of Natural Resources.
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