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Energy

Furie is again supplying Cook Inlet gas to Homer but is still short with Enstar

Furie Operating Alaska’s Julius R Platform, installed in 2015 in Cook Inlet. Furie has had production shortfalls through the winter and hasn’t been meeting its contracted supply agreements with Enstar Natural Gas Co. and the Homer Electric Association. (Courtesy Furie Operating Alaska)

Furie Operating Alaska has returned to meeting some, but not all, of the natural gas supply commitments it has with Southcentral Alaska utilities.

The small Texas-based gas producer resumed supplying Homer Electric Association with all of the Kenai Peninsula electric utility’s demand of approximately 12.4 million cubic feet of feedstock gas per day for its power plants on April 11, according to HEA Manager of Fuel Supply and Renewable Energy Mikel Salzetti.

For about six weeks before that, HEA leaders were forced to purchase spot market gas from other producers in the Cook Inlet basin as well as draw on reserves stored in the Cook Inlet Natural Gas Storage Alaska facility commonly known as CINGSA. Furie had stopped supplying gas to HEA on about Feb. 25, Salzetti said in an early April interview.

Enstar Natural Gas Co., on the other hand, stopped receiving gas from Furie on Jan. 25, according to utility spokeswoman Lindsay Hobson, and hasn’t gotten the amount of gas it contracted for in early 2016 since.

Enstar’s parent company SEMCO Energy Inc. is the majority owner of CINGSA.

Hobson wrote in a June 24 email that the Southcentral gas utility “has been able to negotiate the delivery of short-term volumes from Furie. These volumes vary week to week.”

Hobson said previously that the less-than-contracted deliveries started in late March.

Furie operates the offshore Kitchen Lights natural gas field in central Cook Inlet.

Furie is one of the newer entrants to Cook Inlet that were supposed to ease Southcentral gas supply concerns by developing new fields and adding competition to the market. In 2015 the company installed the Julius R platform at Kitchen Lights, which was the first new production platform built in Cook Inlet in since the 1980s.

The company is one of several small oil and gas operators in Alaska that were impacted by less-than-full payments of refundable tax credit payments by the state, which started in 2015 and are an ongoing issue.

Furie officials said in 2017 they planned to work on developing oil prospects in the Kitchen Lights gas field, but those plans have largely been scuttled because of the state’s delay in paying millions of dollars in oil and gas tax credits the company earned for its previous work, according to the 2019 Kitchen Lights Plan of Development filed last October with the state Division of Oil and Gas.

While Furie’s financial situation is unclear, the company’s website was offline as of June 25. Furie leaders did not respond to requests for comment in time for this story.

In May, Furie produced an average of 14.3 million cubic feet of gas per day from the four wells it has in the Kitchen Lights field, according to Alaska Oil and Gas Conservation Commission records.

A Feb. 11 letter from Enstar and Alaska Pipeline Co. President John Sims states that Furie has had problems proving up its gas reserves to meet its contract with Enstar and has had operational problems with its wells. The producer asked for a delayed delivery of more than half of its firm supply commitment to Enstar on Jan. 17 as it worked on issues at its facility, according to the letter.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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