Posted: Tuesday, December 19, 2000

Joint project may send pipeline south

KENAI - A feasibility study has been commissioned to study bringing natural gas service to southern portions of the Kenai Peninsula.

Homer Electric Association General Manager Norm Story said the proposed $45 million pipeline would run to Ninilchik, then farther to Anchor Point and Homer.

Story said the cooperative has formed a partnership with Alaska Pipeline Co., a subsidiary of Enstar Natural Gas Co., and Unocal Alaska to pay for the study of the proposed 75-mile gas pipeline.

The study will look at the overall feasibility of the plan and consider other factors, such as the scope of the project and different construction phases.

Story said the pipeline probably would be built in stages and follow the path of existing transmission lines and highway rights of way. Construction on portions of the project could begin by 2002, he said.

The economic climate for such a pipeline is tied in part to natural gas prices, he said. National prices soared to record highs recently.

Homer Electric Association buys roughly 90 percent of its wholesale power from Anchorage-based Chugach Electric Association, which generates the bulk of its power from natural gas. Rates are expected to go up in 2001.

Story said under the proposed plan, Alaska Electric Generation and Transmission Inc., owned mostly by Homer Electric Association, would own the natural gas transmission line. Enstar would own and operate retail distribution spurs. Unocal would ship gas on the system.

"These three companies have different areas of expertise," Story said. "Unocal is skilled at finding and producing natural gas, Enstar at gas transmission and retail distribution and AEG&T at utilizing natural gas for power generation on the Kenai Peninsula."

Story said gas exploration was beginning to pick up in areas south of Soldotna.

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