Buccaneer Energy Ltd., Sydney, has signed a contract with Alaska Pipeline Co. and Enstar Natural Gas Co. to sell natural gas from Kenai Loop field onshore Cook Inlet.
The contract is subject to regulatory approvals. Annual weighted average price is $6.03/Mcf. Enstar will be responsible for transportation costs after the receipt point and absorb the current 21¢/Mcf pipeline tariff. The price is split seasonally and has a March-November floor of $5.96, a December-February floor of $7.06, and a year-round ceiling of $10.
Deliveries at nonfirm daily auction for peaking demand are to start in December 2011 when facilities are built. Enstar’s commitment to acquire gas at contract rates begins when the Cook Inlet Natural Gas Storage facility begins service, set for April 2012.
As part of the contract, Buccaneer committed to spud a second well at Kenai Loop by Nov. 1, 2011, and a third by Nov. 1, 2013. Buccaneer is on track to spud its second well this quarter and anticipates drilling a third well in April-May 2012.