Three Cook Inlet gas storage plans pending for winter demand

Alaska is weighing three applications to store natural gas underground in Cook Inlet, to cover winter demand that current production cannot meet.

Gas comes out of the ground at a fairly steady rate, while demand spikes when temperatures drop and Southcentral turns up the heat. Storage banks the surplus for those peaks.

Two are from Hilcorp. Its Kenai Loop project would use about 1,330 acres of state-owned subsurface reservoir in the Tyonek sand. Its Beluga River project, roughly 36 miles west of Anchorage, targets the Sterling sands across about 6,100 acres. ENSTAR filed separately at Kenai Loop. Comment periods closed in July, and each Hilcorp project also needs a storage injection order from the Alaska Oil and Gas Conservation Commission.

ENSTAR President John Sims said at an Aug. 3 press conference that more storage is necessary because Cook Inlet production is not high enough to meet everyone's demand in cold weather.

The region's roughly 70 billion cubic feet of annual gas use breaks down to about 35 Bcf for gas utilities, 25 Bcf for electrical utilities and 10 Bcf for field and industrial use.

The Regulatory Commission of Alaska denied ENSTAR's petition for an advance determination of prudence on Kenai Loop, finding the company had not met its burden of proof. The commission cited an insufficient factual record, unresolved timing questions and the investment costs customers would carry. That ruling decides who pays for the investment, not whether the storage is approved.

Cook Inlet has three active gas storage facilities, two of them regulated: Kenai Pool 6 and Cook Inlet Natural Gas Storage Alaska.

Natural Resources Commissioner John Crowther and Oil and Gas Director Haley Paine presented the applications Thursday to the Legislature's Joint Resources Committee. They reported Hilcorp had completed 20 gas wells through August 2026, with about seven more planned by December.