ENSTAR locks in $16 gas price for North Slope supply

ENSTAR has locked in a $16 per thousand cubic feet commodity price for North Slope pipeline gas, a benchmark that sits below imported LNG but still above the cost of current Cook Inlet supply before delivery charges. For North Slope readers, the number matters because it helps set the market value of borough gas and signals how hard it may be to finance the next big phase of Alaska’s gas future.

John Sims, ENSTAR’s president, told the Alaska House Finance Committee that the company had secured the price. That figure undercuts imported LNG alternatives that have been priced around $20 to $23 per thousand cubic feet, but it still stands about 48 percent above ENSTAR’s current Cook Inlet supply price of roughly $10.80 before distribution and storage are added.

Those added charges change the picture for Southcentral customers. ENSTAR says distribution and storage can add another $4.50 to $6 per thousand cubic feet to customer bills, which means the gap between the raw commodity price and what households actually pay remains a central issue in the state’s energy debate. For families, businesses and public buildings in Anchorage and other Southcentral communities, the question is not just whether gas comes from the Inlet, from a tanker or from a pipeline, but how much each step in the supply chain adds to the final bill.

The price also carries weight for Alaska LNG. Glenfarne told legislators that the broader Alaska LNG project is now estimated at $44.5 billion to $54.5 billion, with the pipeline phase alone at $13.2 billion to $16.9 billion. Under the structure described to lawmakers, the ENSTAR agreement is a fixed price at $16 per thousand cubic feet and is not subject to cost overruns, a feature meant to make the project easier to finance.

ENSTAR has said it began studying ways to bridge the gap between declining Cook Inlet gas and North Slope supply after Hilcorp’s 2022 announcement about supply challenges. The company also briefed the Alaska Legislature and the Regulatory Commission of Alaska on those options, while the commission now has a tariff filing based on a 2024 test year. That paperwork reflects a broader shift in Alaska’s gas market, where Cook Inlet once supplied the state and Kenai LNG exports began in 1969 before shipments to Japan ended in 2015 as local demand grew and supply tightened.

Taken together, the $16 benchmark says North Slope gas still has a place in Alaska’s energy future, but only if the state can make the economics work against imported LNG, higher delivery costs and the long shadow of Cook Inlet decline.