DNR opens comment on Hilcorp gas storage lease at Beluga River

The Alaska Department of Natural Resources is accepting public comments on Hilcorp Alaska's application for a gas storage lease at Beluga River. The company wants to store natural gas in depleted reservoirs to meet winter peak demand.

The Division of Oil and Gas received the application from Hilcorp Alaska, LLC and posted a public notice. The application package is available online and at the division's Anchorage office. The notice invites written comments from local residents, utilities, tribal entities, conservation groups, and other stakeholders on potential environmental, subsistence, and economic impacts.

The lease would allow Hilcorp to inject and store natural gas in depleted or partially depleted Beluga River Unit reservoirs. Chugach Electric Association secured a gas storage contract with Hilcorp Alaska Gas Storage in February that provides 1.5 billion cubic feet of reserved storage capacity, expandable over three years.

John Sims, president of ENSTAR, explained how storage fills the gap between summer and winter demand. "You can see in the summer months, obviously we're not consuming as much gas here as a community. So between 45 million a day and in the wintertime, that ramps up to 162 million a day. Reminder, our total peak demand day is 320. So how do we get to that 320? We supplant that with storage that we've procured, whether it's Cook Inlet, Natural Gas Storage, Alaska."

Hilcorp previously held a gas storage lease in the Beluga 71-3 gas sands covering 863 acres within the Beluga River Unit. The company released that lease during the 2015 plan of development period, according to Division of Oil and Gas records. The new application seeks to use the same depleted field structure for seasonal storage.

The proposed storage lease area overlaps salmon habitat and beluga whale critical habitat on state-managed lands near the Beluga River mouth on the west side of Cook Inlet. NOAA Fisheries designated portions of upper Cook Inlet as critical habitat for the endangered Cook Inlet beluga whale in 2011.

Any gas storage project requires a lease from the Department of Natural Resources and technical approval from the Alaska Oil and Gas Conservation Commission before gas can be injected and stored in the reservoir. The public notice solicits written public comments by a specified deadline. Comments can be submitted online or mailed to the Division of Oil and Gas in Anchorage.