Alaska regulators have conditionally approved a request by Southcentral Alaska’s natural gas utility, Enstar, to build a pipeline that could potentially import natural gas into the state as Cook Inlet basin supplies wane. The Regulatory Commission of Alaska’s decision supports Alaska Pipeline Co., an Enstar affiliate, in expanding its service area and extending a 16-mile pipeline to Port MacKenzie, located about 5 miles north of Anchorage.
This $57 million project, requested in May, is a precautionary measure to prepare for potential future gas imports. The pipeline would connect to the existing Alaska Pipeline Co. network, ensuring a stable supply for Enstar.
Enstar anticipates a local gas supply shortage starting next year due to insufficient new gas production in Cook Inlet. Hilcorp, the dominant producer in the region, has indicated it lacks sufficient reserves to meet future demand after current contracts expire. The regulatory agency emphasized the need for a diversified gas supply to address the impending shortfall.
The project aims to bring liquefied natural gas (LNG) via specialized ships, known as “floating storage regasification units,” to Port MacKenzie. These units convert LNG back into gas for pipeline transport. This method has gained popularity in Europe following Russia’s reduction of gas exports.
Enstar, which serves 150,000 customers and supplies 80% of Southcentral Alaska’s electricity, has not yet finalized plans to import LNG. The pipeline construction is anticipated to begin next summer if the decision to import gas is made. Enstar plans to file a gas sales agreement with the regulatory agency by the end of this year.
The feasibility of Port MacKenzie as a receiving terminal site is still under evaluation, with different engineering and permitting requirements depending on the chosen site. This approval is a crucial step in addressing Southcentral Alaska’s future energy needs.