Hilcorp, ENSTAR seek leases for three Cook Inlet gas storage sites

Hilcorp Cook Inlet and ENSTAR Natural Gas Company filed three separate applications to convert depleted Cook Inlet gas fields into natural gas storage facilities, the Alaska Department of Natural Resources announced this week.

Hilcorp filed two applications. One would create a utility-scale storage facility at the Kenai Loop Gas Field. The other would use the Beluga River Unit, tapping subsurface pore space in the Sterling A1, A2, and A3 Sands. ENSTAR filed a third application to convert gas-producing horizons into a storage reservoir. All three proposals would store natural gas in subsurface pore space in existing fields.

The Alaska Energy Authority has identified gas storage as critical to improving supply reliability for Southcentral Alaska. A 2023 presentation to the Alaska Energy Security Task Force said the state was working to facilitate storage through lease amendments and to support additional commercial steps to shore up Cook Inlet gas supply.

The Division of Oil and Gas is accepting public comments on all three proposals. The applications are being processed under state statutes governing oil and gas leasing.

Governor Mike Dunleavy has acknowledged the limits of Cook Inlet production. "I want to thank Hilcorp, I want to thank Hex and others that are trying to get more gas out of the inlet, but it's a very, very mature basin," Dunleavy said. "And the hope that we're going to stumble upon something large there, according to our people, is slim."

The state's first gas storage agreement was at Swanson River Field, according to legislative records. The current proposals represent a coordinated push to expand storage capacity as Cook Inlet reserves decline.

Written comments on the applications can be submitted to the Division of Oil and Gas. The division will provide copies of final decisions to all parties who submit comments.