After losing some capacity in March to a sand-clogged well and failed dehydration unit, Cook Inlet Natural Gas Storage Alaska (CINGSA) is planning to spend an estimated $41 million to back up its ability to store and dispense the fuel gas that generates most of south central Alaska’s heat and electricity.
On April 27 CINGSA officials asked the Regulatory Commission of Alaska (RCA) — the state agency that oversees utility pricing — to allow them to recover the project’s cost in future storage rates. If approved, construction could start in January 2019 and the new features could be operating at the end of that year, according to CINGSA’s petition.
CINGSA Vice President of Operations John Lau cited the region’s relative sparsity of backup gas storage when justifying the work in an affidavit to the RCA.
“The behavior of CINGSA’s customers differs from normal storage customers in the Lower 48,” Lau wrote. “The Lower 48 has a substantial natural gas transportation system consisting of multitudes of production fields, interconnected pipelines, and robust gas storage facilities. If a particular storage facility has a problem, it is common to call upon a different storage facility to provide the needed deliverability.”
Since 2012 CINGSA has been storing Cook Inlet natural gas in a depleted reservoir under the mouth of the Kenai River for four utility clients — the electrical utilities Homer Electric Association, Chugach Electric Association and Anchorage’s Municipal Light and Power, as well as the gas distributor ENSTAR, which shares a same parent company with CINGSA, the Michigan-based SEMCO Energy. CINGSA’s 11 billion cubic feet of storage capacity have since become important for local heat and power: in January 2017 — a record month for the facility — CINGSA supplied about 30 percent of the gas moved around the Cook Inlet region that month, and on one particular day — Jan. 19, 2017 — it supplied 44 percent of ENSTAR’s demand.
In March, built-up sand in a well caused CINGSA to lose about 20 percent of its capacity. The well was cleaned out in early April. The loss, had it occurred on a very cold mid-winter day, could have affected gas delivery to utilities, homes, and businesses, CINGSA and ENSTAR spokesperson Lindsay Hobson said at the time.
CINGSA’s five existing wells are able to deliver 150 million cubic feet of gas a day — about a third of the Cook Inlet region’s high-use daily gas needs, according to Lau’s affidavit. The two new wells CINGSA plans to add would each raise the delivery capacity by 30 million cubic feet of gas per day.
When CINGSA was being planned and built between 2010 and 2012, its proponents expected it to operate similarly to gas storage facilities in the Lower 48: holding gas pumped in during the summer when demand is low, and distributing gas in the winter when the demand is high. Since then, the facility’s operators have found demand is more erratic.
“CINGSA customers… use the facility for many purposes to fit their business needs,” Lau wrote. “It is not unusual for CINGSA customers to switch from injection to withdrawal and back again on a daily basis, or even during the course of a day.”
CINGSA might inject between 5 and 50 million cubic feet of gas a day, Lau wrote. The timing of injections and withdrawals may not be strictly seasonal — Lau wrote that “over the last four winters, CINGSA’s customers have requested injection service on 61% of the days in November and December.” The variability makes gas compressors less efficient and causes more wear and tear. CINGSA plans to install a smaller, more efficient compressor to take some of this demand off its larger existing ones. The smaller compressor would consume less fuel gas and save CINGSA about $92,000 a year in maintenance costs, Lau wrote.
One of CINGSA’s dehyrdration units — which removes water vapor from natural gas — also failed in early 2018, which could have allowed water into distribution pipelines where it can clog filters, freeze inside pressure control valves, affect measurements, and lead to corrosion.
“With the current equipment and configuration, a loss of the dehydration system on a peak winter day would likely result in a total loss of gas flow to customers,” Lau wrote.
The redundancy project would also add a second dehydration unit.
Kenai Peninsula Borough Mayor Charlie Pierce, Matanuska-Susitna Borough Manager John Moosey, Representatives Mike Chenault (R-Nikiski) and Matt Claman (D-Anchorage), and Senator Kevin Meyer (R-Anchorage) wrote letters to the RCA in support of CINGSA adding redundancy.
Reach Ben Boettger at bboettger@peninsulaclarion.com.
