Alaska Online Public Notices #225521

Proposed ENSTAR Natural Gas Storage Lease in the Kenai Loop Gas Field

Alaska is considering a long-term natural gas storage lease in the Kenai Loop Gas Field; this notice seeks public input and is not a solicitation or lease award. - Government buyer: Alaska Department of Natural Resources, Division of Oil and Gas, Director’s office. - Proposed lease: ADL 394695, covering approximately 500 acres of state subsurface rights in the Kenai Loop Gas Field near Kenai, Alaska, in the Upper Tyonek Formation. - Proposed operator and named companies: ENSTAR Natural Gas Company, LLC is the applicant favored in the preliminary finding. Hilcorp is also discussed as an applicant; AIX Energy, LLC is the existing lessee associated with the field and a party to a proposed acquisition by ENSTAR. Cook Inlet LNG, LLC is mentioned in connection with a separate LNG import project. These entities are not identified as awardees. - Proposed development: ENSTAR would initially convert three existing wells and reuse existing infrastructure, with potential drilling of up to six additional wells, compressor additions, and pad expansion. - Target operating capacity when fully developed: approximately 20.5 Bcf of working gas, about 8 Bcf of cushion gas, and peak injection and withdrawal capacity of 150 MMscf per day. - Notable requirements and terms: operations would require approved plans, permits, regulatory approvals, environmental mitigation, and surface-use arrangements with the City of Kenai. The lease would not override existing oil and gas leases. Proposed fees include $10,000 annually, an additional $5,000 per additional well, and $0.012 per thousand standard cubic feet of non-native gas produced. - Proposed lease term: 25 years, with possible additional 10-year renewal terms. No effective date or project completion date is specified. - No products are being purchased. The preliminary finding is subject to public comment and a final determination.

Description

The Alaska Department of Natural Resources, Division of Oil and Gas, issued a preliminary written finding that a gas storage lease in the Kenai Loop Gas Field is in the state's best interests and is requesting public comments. The proposed storage area is approximately 500 acres of state-owned subsurface reservoir in the City of Kenai, in Township 6 North, Range 11 West, Seward Meridian, Sections 32, 33, and 34. Only the state's portion of the reservoir is proposed for lease; a lease must not interfere with existing oil and gas leases and must include fee and surface damage provisions. Written comments must be received by 5:00 p.m. on November 13, 2026, to be considered.

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