ANCHORAGE, Alaska (AP) — The latest contract between Enstar Natural Gas Co. and Hilcorp Alaska LLC could result in $53.6 million in savings for Alaska natural gas customers.

Contract terms filed with the Regulatory Commission of Alaska indicate Enstar customers should save about 7% in gas costs from June 1 through March 2023, The Alaska Journal of Commerce reported Wednesday.

The agreement amends a contract signed in 2016 and extends the agreement between the companies through March 2033.

Enstar supplies natural gas to about 148,000 customers and the company said Hilcorp “reliably delivered” 82% of the utility’s gas in 2019 and is expected to cover 80% this year.

Enstar could purchase anywhere from 64% to 97% of its annual gas requirement under the new terms.

The utility expects customer demand to remain at roughly 33.6 billion cubic feet (951 million cubic meters) per year through 2025.


Multiple Cook Inlet producers have filed for bankruptcy in recent years and Enstar’s “gas supply certainty is vital at a time of growing scarcity,” company officials said.

Gas will be sold at $7.55 per thousand cubic feet in the first year of the contract but will vary afterwards. The price in subsequent years will be set through a calculation based on three price indices published by the Bureau of Labor Statistics, the company said.

The price cannot increase more than 1.5% or decrease more than 1% in any given year, meaning the deal has an effective price ceiling of $8.89 per thousand cubic feet in 2033.

State Senate President Cathy Giessel and state Sens. Josh Revak and Shelley Hughes, all Republicans, urged the state regulatory commission to approve the contract.

“When Alaska gas is on relative price parity with imports, this use of our own resource will support the direct and indirect jobs in the resource development industry that in turn support our communities,” Giessel wrote.

A public comment period is open through May 20.