Southcentral is 3 Bcf short this winter, and producers told lawmakers the gas runs out in 2029

ENSTAR has testified it is 3 Bcf short this winter. Luke Saugey, senior vice president of Hilcorp Alaska, told lawmakers Hilcorp enters the season with about 30 Bcf in its Pool 6 storage reservoir, nearly all committed to ENSTAR for later delivery. Releasing it early would require contract changes now under negotiation. "We can make the gas available today as long as we all understand that we will be unable to make that same volume of gas available in the future," he said. Representative Donna Mears pressed whether Hilcorp could sell additional volumes outside the contract. It cannot, Saugey said.

Southcentral Alaska will not have enough gas to get through the winter of 2029 without imported liquefied natural gas or North Slope gas, three energy companies told the Alaska Legislature's Joint Resources Committee in Juneau on Thursday.

Saugey said Hilcorp's model shows summer production barely matching demand three years out. "That intersection of supply and demand comes in 2029," Saugey said. "We will enter winter 2029 with not nearly enough gas in storage to make it through the winter." Without another source by then, he said, "there will not be enough gas in the system to meet all of the utilities' needs."

Cook Inlet basin production fell to roughly 61 billion cubic feet in 2025, down from 79 Bcf in 2016, while demand holds near 65 to 70 Bcf.

Chugach Electric's Hilcorp contract expires at the end of the first quarter of 2028, chief executive Arthur Miller said, and banked gas stretches the utility to early 2029, after which it depends on imports. "No producer has come to Chugach and said, I can guarantee and provide gas supply to you beginning in 2029," Miller said. Short-term substitutes, including diesel generation, would run $29 to more than $60 per thousand cubic feet, he said.

The Regulatory Commission of Alaska opened a docket earlier this year on future LNG import costs for utilities, cautioning that overlapping import proposals could raise consumer rates and duplicate infrastructure, and that firm cost information and rate-review authority are needed before import facilities or costs are locked in.

Hex Energy chief financial officer Mike Coy called Cook Inlet "an underexplored basin" and asked lawmakers for expanded royalty relief, a cut in what it pays the state on production, plus longer buyer commitments and a second offshore rig. Only Hilcorp's Spartan 151 is available. The agenda also listed BlueCrest Energy chief executive Benjamin Johnson and a Division of Oil and Gas presentation marked removed.